Hi All,
This is my first post. I want to give a little background info then I have 3 questions to ask. I am only new to this website/forum. I guess my loans are probably not set up in the best way (open to advice) but heres what i have atm.
Loan1. Variable rate loan, principle and interest, 100% for IP, I have my rental income paid directly into this account.
Loan2. LOC, 20% of total drawings used for IP and the remainder drawn for personal use. I have my salary and everyday expenses paid into/taken out of this account.
Loan3. Variable rate loan, principle and interest, 100% used to purchase land with the intention of building a rental property on it when I have it close to paid off.
I can only claim 20% of the interest as a tax deduction on my LOC as thats all that is used for investment purposes.
Q1:As my salary (or any other monies) get paid into the LOC account does that reduce the 20% I can claim or is that money coming off of my personal debt. I was told by my friend who works in a bank the ATO's view is that the money comes off the investment debt not the personal debt therefore each time I put money into the LOC it reduces the 20% that I can claim, is that true?
Q2: With loan3 after reading rental properties booklet from the ATO and other info from their website do I understand correctly that "as I intend to use the land to build a rental property" I can claim the interest on that loan too?
Q3: If I can claim the interest in question 2, How long have u got to actually build the property, Id like to pay most of the land of first, then build?
Thx in advance for any advice
This is my first post. I want to give a little background info then I have 3 questions to ask. I am only new to this website/forum. I guess my loans are probably not set up in the best way (open to advice) but heres what i have atm.
Loan1. Variable rate loan, principle and interest, 100% for IP, I have my rental income paid directly into this account.
Loan2. LOC, 20% of total drawings used for IP and the remainder drawn for personal use. I have my salary and everyday expenses paid into/taken out of this account.
Loan3. Variable rate loan, principle and interest, 100% used to purchase land with the intention of building a rental property on it when I have it close to paid off.
I can only claim 20% of the interest as a tax deduction on my LOC as thats all that is used for investment purposes.
Q1:As my salary (or any other monies) get paid into the LOC account does that reduce the 20% I can claim or is that money coming off of my personal debt. I was told by my friend who works in a bank the ATO's view is that the money comes off the investment debt not the personal debt therefore each time I put money into the LOC it reduces the 20% that I can claim, is that true?
Q2: With loan3 after reading rental properties booklet from the ATO and other info from their website do I understand correctly that "as I intend to use the land to build a rental property" I can claim the interest on that loan too?
Q3: If I can claim the interest in question 2, How long have u got to actually build the property, Id like to pay most of the land of first, then build?
Thx in advance for any advice