Claiming interest (PPOR changed to IP)

Viewing 5 posts - 1 through 5 (of 5 total)

HousesOnly
Participant
@housesonly
Join Date: 2003
Post Count: 167
March 4, 2004 - 5:28 am
Does anyone know what would happen in the following situation.
If one owns a PPOR with mortgage of say $100K and one buys another property which one moves into. Can one increase the mortgage on the first PPOR (to say $250K dependent on valuation) just before (say a month before) moving into the second property and claim all the interest on the increase mortgage. If not, is there any cut-off point at which this happens?
JetDollars
Participant
@jetdollars
Join Date: 2003
Post Count: 2,435
March 4, 2004 - 5:41 am
Originally posted by HousesOnly:
Does anyone know what would happen in the following situation.
If one owns a PPOR with mortgage of say $100K and one buys another property which one moves into. Can one increase the mortgage on the first PPOR (to say $250K dependent on valuation) just before (say a month before) moving into the second property and claim all the interest on the increase mortgage. If not, is there any cut-off point at which this happens?
It is depend on what one going to do with the money. If one use money to go holiday or pay off the second mortgage (which is not PPOR) then you can’t claim all of them.
Where as one use money to buy 2nd IPs then one can claim all of them.
Warm Regards
ChanDollars
[Keep going, you’re on your way to Frolic Freedom!]
melbear
Member
@melbear
Join Date: 2003
Post Count: 2,429
March 4, 2004 - 6:58 am
Houses Only, if you are using the refinance to pay for your new PPOR, then nope, can’t be claimed. It’s the purpose for the money, not the security.
Cheers
Mel
HousesOnly
Participant
@housesonly
Join Date: 2003
Post Count: 167
March 5, 2004 - 4:14 am
So in summary, I can increase the mortgage on one IP property to provide a deposit for another IP or two at any time and claim this ongoing interest as a deduction. Does one have to be able to produce an audit trail of the capital flow to prove it was used for another IP and if so how (bank statements are not too revealing)?
JetDollars
Participant
@jetdollars
Join Date: 2003
Post Count: 2,435
March 5, 2004 - 5:02 am
Originally posted by HousesOnly:
So in summary, I can increase the mortgage on one IP property to provide a deposit for another IP or two at any time and claim this ongoing interest as a deduction. Does one have to be able to produce an audit trail of the capital flow to prove it was used for another IP and if so how (bank statements are not too revealing)?
Yap. If need prove the settlement document, bank statement when you draw money and where you use it ie as deposit.
Warm Regards
ChanDollars
[Keep going, you’re on your way to Frolic Freedom!]