Firstly, I apologise for creating a new thread….there seems to be one popping up every couple of minutes here. But after not having much luck with the Search tool….
1) Is the Deposit that is used to purchase an Investment Property tax deductible?
2) Is the amount of cahflow received that goes into paying off the loan on an IP also tax-deductible, or is it purely the amount that is used to pay off the interest rate component?
Cheers
DougHave handcuffs….will travel.
Hi nofear
I am not an accountant, but to the best of my knowledge it is just the interest on both the deposit and the loan you can claim tax on.
Please check with an accountant tho!
Regards Bear
Hi Doug,
Thanks for your post.
1) Is the Deposit that is used to purchase an Investment Property tax deductible?No – it forms part of the cost of your property.
2) Is the amount of cahflow received that goes into paying off the loan on an IP also tax-deductible, or is it purely the amount that is used to pay off the interest rate component?Your cashflow will have a portion of capital (ie. loan repayment, capital repairs) and a portion of income (profit). Only the income portion is taxable – the capital portion is adjusted in terms of any capital gains tax when you sell.
This is a little complicated… perhaps a 1/2 hr chat with any properly qualified tax adviser would be very helpful and worth the $100 or so dollars.
Cheers,
Steve McKnight
**********
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Steve and Bear, thanx for your time.
Cheers
DougI admit it….I know nothing..
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