Hi,
I have several IP’s which are all positively geared so tax deduction is not my major focus but it is always good if you can get it
.On my PPOR property which is now rented out due to working away I am installing an air conditioner ($10k). The interest payments on this loan is deductible and I have been claiming this for several years now.
If I use my redraw on this mortgage (causing my loan to increase $10k) to pay for the aircon will that portion of the loan still be tax deductible considering I am using it to install an asset in an income generating asset?
I do have cash to pay for the aircon but if the redraw can still be claimed as deductible interest I would prefer that option.
Also, will the aircon unit have to be added to my depreciation schedule or simply advise my accountant who will add it into my scenario and automatically depreciate this asset.
Happy investing and regards
Brad
You would be borrowing to purchase an asset for an investment property, so I can't see a problem with it. If you were to ever move back in the whole loan would no longer be deductible so cant see a problem there ether.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Your accountant should be able to add the air conditioner to your depreciation schedule and work out its effective life of the air conditioner.
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