Refinanced IP - are all costs expenses?

Old loan was Lo Doc - exit costs:
Deferred est fee $8550
Legals $300

New loan thru bank:
Registration fees $196
Legals $330
LMI $6781.50

So are they ALL expenses and tax deductible now?
some are and others are used to reduce capital gains when sold.


Hi Thomas

My non bean understanding

The OLD loan and allied exit costs are fully deductibe in the year incurred, based on the depreciate iver 5 years on life of the loan rule

The new or entry costs are depreciable over 5 years

Speak with a savvy bean counter in property like


Quick reply from my accountant this morning - Thanks James Carroll.

"All bank fees to establish the loan are called borrowing expenses and are amortised over a five year (60 months)period or the length of the loan whichever is the shortest period.

The new loan costs will be deductible over 5 years/60 months. The amount claimable will be $7,308 over 60 month equals $122 per month for nine months of the 2010 financial year is $1,098.

The old loan exit fees will be deductible this year, as the same rules as above apply except that the loan has been paid out therefore you can claim the balance of all borrowing costs on this particular loan. So all $8,850 in costs will be claimable this year.

They are legitimate expenses, but just a warning that I am pretty sure with such a big claim we will be waving a red flag at the ATO, so we need to ensure all our paperwork is spot on this year."
I'm in the same boat. Did your accountant say which expense item I should be claiming the early exit fees under?

many thanks in advance