We accessed some equity from our ppor for deposit and costs for first IP, i fear we did it the wrong way. Should we have borrowed the full amount plus costs for Ip on the one loan, meaning the interest on the full amount would be tax deductable.The way i see it the interest on the extra amount we borrowed on our ppor loan is not tax deductable. Is this right or can we still claim for the interest on the extra amount?.
FostonLife is a series of new beginnings
The amount against your PPOR is deductible. Remember the golden rule is that it is the purpose of the loan that determines deductibility.
Ask the bank to detail it seperately in a split so that you can clearly see which amount is for the PPOR and which is for the IP. You can even pay these down at different rates if you choose.
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.
Thanks Mortgagehunter and Mortgage adviser for your advice, Can i still do this if the loan papers have already been signed. I will be talking to the bank to find out what i can do.
Cheers
FostonLife is a series of new beginnings
Yes mate, go in and ask them to make the changes you need.
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.
Hi Foston,
In affect you are borrowing 100%, this is fine,20% Deposit and costs for IP purchase, raised from equity in PPR (deductible debt)
80% loan for IP (deductible debt)This structure limits the Bank to the 1 property held as security over the investment loan, and will minimize the risk of having all your future lending tied up with the One lender,
As Simon & Rob have suggested, organize a split, with a 100% offset attached to the non-deductible P & I portion of the loan,
Regards
Steven
Mortgage Broker[email protected]
http://www.mobilemortgagemarket.com.au
Ph:1800 820 500
VICTORIAPLEASE note comments made should NOT be taken as specific taxation, financial, legal or investment advice. Please seek professional, specific advice.
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