All Topics / General Property / Are principle repayments tax deductible?

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  • Profile photo of Naremburn123Naremburn123
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    @naremburn123
    Join Date: 2008
    Post Count: 61
    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

    Profile photo of DerekDerek
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    @derek
    Join Date: 2004
    Post 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.

    Profile photo of Naremburn123Naremburn123
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    @naremburn123
    Join Date: 2008
    Post Count: 61
    March 25, 2011 - 3:13 am

    Great, thanks for that Derek.

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