Are principle repayments tax deductible?

March 24, 2011 - 7:24 am

Hi guys,

I currently have 3 investment properties. And I'm paying IO on all 3. If I were to switch a loan to P&I and the property was negatively geared, can I claim the total shortfall between the rent and the interest repayments+other costs etc? Or can I only claim on the interest component of the repayment?

Any advice would be much appreciated.

Dean

[DerekMember@derekJoin Date: 2004Post Count: 3,544]

March 24, 2011 - 8:35 am

Only the interest costs associated with a loan are deductible.

Any principle is considered a repayment of capital and therefore not deductible.

March 25, 2011 - 3:13 am

Great, thanks for that Derek.