Mistake

N

Nem

Hi all,

For not thinking clearly and helping friend sell off plan apartment, I purchased apartment in Auckland, it settled in 2006

I withdraw money from PPOR I had back then for 20% deposit and expenses, so that was around 70K all up.

I sold that PPOR and moved to new one, joining all mortgages in 1 (huuuge mistake I know :( )

Just in case I thought I would ask, is there anything I can do to be able to claim interest on 70K or not? If not how much money I am loosing on my tax return??

Apartment was purchased for 224K NZD, now its still aprox same value, maybe 235K NZD
Mortgage is 154K

Please help me add up numbers and think, should I sell and buy something in Aus???

Thank you
 
Hi Nem,

Assuming you can you claim interest on a loan used to buy an income producing asset outside of Australia....I would assume you can if the income is declared in your taxable income here.

You may be able to apportion some of the interest from the original $70k loan if the new loan was established at the same time as the old one was paid out. Refinancing principle may apply. However you would really want to get an accountants ok and possibly a private ruling.

$70k @ 5.00% pa = $3500 pa in potential interest deductions that you are not getting but as the loan is mixed with other purposes it is impossible for us to say how much of the total interest bill you could apportion.

Say you could claim $2000 pa as the apportioned interest and you are on a margin tax rate of 25% then you are missing out on $500 per year

Get an accountant onto it.
 
Thank you for reply Marty

My husband is on higher bracket and that loan was taken solely for NZ purpose, so deductible amount should be $3,500...
 
From my PPOR mortgage? Didnt do any withdrawals no

From NZ mortgage i did few times only for investment bills
 
Nem said:
Hi all,

For not thinking clearly and helping friend sell off plan apartment, I purchased apartment in Auckland, it settled in 2006

I withdraw money from PPOR I had back then for 20% deposit and expenses, so that was around 70K all up.

I sold that PPOR and moved to new one, joining all mortgages in 1 (huuuge mistake I know :( )

Just in case I thought I would ask, is there anything I can do to be able to claim interest on 70K or not? If not how much money I am loosing on my tax return??

Apartment was purchased for 224K NZD, now its still aprox same value, maybe 235K NZD
Mortgage is 154K

Please help me add up numbers and think, should I sell and buy something in Aus???

Thank you
Click to expand...

My interpretation based on the above is that you repaid the loan connected to your PPOR and this includes the money used for the NZ property. ie you repaid it.

So nothing you can do to recover from this.
 
Terry_w said:
My interpretation based on the above is that you repaid the loan connected to your PPOR and this includes the money used for the NZ property. ie you repaid it.

So nothing you can do to recover from this.
Click to expand...

That's what I thought :(

So I am loosing in deductible 70,000k @ 5% interest rate is $3,500, if on 35% tax bracket around $1,225 a year on that portion in tax refund??
 
Nem said:
That's what I thought :(

So I am loosing in deductible 70,000k @ 5% interest rate is $3,500, if on 35% tax bracket around $1,225 a year on that portion in tax refund??
Click to expand...

Yes that is probably a good rough estimate.

One of my clients is losing $15k per year, so don't feel too bad.
 
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