Tax deduction for Family member borrowings for deposit

[SmiTTy2008]

Hi SS

I have purchased a property, borrowing 80% funds from a bank. Unfortunatley I have not had enough time to top up my PPOR loan for the 20% deposit.
Can I borrow 20% from a family member as a commercial agreement (contract etc), then after settlement, top up my PPOR loan for the 20% deposit to repay the family member, whilst maintaining tax deductibility on the 20% bank loan (due to investment purpose) ?

If so, is there anything I need to be weary of .. thanks!

 

[Terry_w]

Hi SS

I have purchased a property, borrowing 80% funds from a bank. Unfortunatley I have not had enough time to top up my PPOR loan for the 20% deposit.
Can I borrow 20% from a family member as a commercial agreement (contract etc), then after settlement, top up my PPOR loan for the 20% deposit to repay the family member, whilst maintaining tax deductibility on the 20% bank loan (due to investment purpose) ?

If so, is there anything I need to be weary of .. thanks!

it is is a proper arms lenght, commercial transaction then it can be possible that this will be acceptable. make sure commercial terms and written loan agreement with interest paid as per the agreement.

 

[marg4000]

The family member will then have to declare the interest on his/her tax return.
Marg