All Topics / Finance / is tax deductible on LMI to access equity from PPOR for IP?

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  • Profile photo of pcnpcn
    Participant
    @pcn
    Join Date: 2013
    Post Count: 13
    February 2, 2013 - 2:20 am

    Hi there,

    I don't have much equity.

    I currently have a loan for my PPOR under 80%. However, I want to borrow it up to 90% for my PPOR in order to draw the equity for my IP purchase (5% deposit+cost). This means that I need to pay LMI when I borrow up to 90% from my PPOR. Is this LMI tax deductible?

    I know that the LMI for the purchase of my IP (95%) will be tax deductible. Just not sure the LMI to access the equity from my PPOR (I think it should because it is for investment purpose).

    Thanks,

    pcn

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213
    February 2, 2013 - 6:34 am

    Possibly, depending on a few things. Speak to your accountant before doing anything.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024
    February 2, 2013 - 7:47 am

    I would say as long as the cost was triggered because of the sub loan application and those funds were for investment the answer would be Yes it would be deductible.

    Remember of course LMI as a loan cost is deductible over 5 Years or the term of the loan which is ever is shorter.

    Cheers

    Yours in Finance

    Richard Taylor | Australia's leading private lender

    Profile photo of Jamie MooreJamie Moore
    Participant
    @jamie-m
    Join Date: 2010
    Post Count: 5,069
    February 2, 2013 - 8:26 am

    I'm with the other guys – it would make sense that it's deductible. At least a portion of it anyway. 

    Like Terry said – if in doubt, consult an accountant first.

    Cheers

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
    Email Me | Phone Me

    Mortgage Broker assisting clients Australia wide Email: [email protected]

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