Where a person’s family home with an existing mortgage on it is simply rented out (ie. it becomes an income-producing rental property and the person moves out and pays rent as a tenant himself elsewhere), is the interest on that loan deductible or does the loan need to be refinanced for the interest to be deductible? (since the original purpose of the loan was to buy a private family residence, not to turn it into a rental property)
The original purpose of the loan was to buy that property. That property is now taxable income producing. As the interest is a cost of producing that income it is now deductible.
No need to touch the loan for any reason.
Cheers,
Simon Macks
Mortgage Broker
http://www.mortgagehunter.com.au
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Simon,
Thanks for clarifying that for me!
Regards Geoff
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