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Apportioning Interest on IP turned PPOR

Discussion in 'Accounting & Tax' started by Frosty123, 3rd Jul, 2016.

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  1. Frosty123

    Frosty123 Well-Known Member

    Joined:
    12th Nov, 2015
    Posts:
    58
    Location:
    VIC
    Hi all,

    I moved into one of my IP's a few months back.
    Obviously the mortgage interest is only deductible for the period the property was being rented out for.
    Not sure how to apportion the interest though.
    Would I calculate it pro-rata (ie. if leased out for 26 weeks of the year, 50% is deductible)
    or would I sum each months interest expense, and calculate the interest pro-rata on the month I moved back in?

    Thanks

    Frosty
     
  2. Terry_w

    Terry_w Well-Known Member Business Member

    Joined:
    18th Jun, 2015
    Posts:
    13,267
    Location:
    Remote
    No, it would be the months while it was available for rent that would be deductible. If you moved in mid stream you can apportion that month.

    Apportioning a whole year's interest on a percentage basis wont work out if you bring in a large sum of cash to store in the offset account, for example.