Are loan costs tax deductible immediately or a capital expense?

I have been charged 3 fees:

1) Bank establishment fee
2) LMI processing fee
3) Settlement fee

 

neither.

Borrowing costs are deductible over 5 years or the life of the loan. Settlement fee in relation to transfer of title is a capital cost, but settlement in relation to a loan would be a borrowing cost.

 

1) Bank establishment fee
just deduct it immediately under Borrowing Expenses (E).

2) LMI processing fee
Borrowing Expenses (E). think about it this way if you didn't buy the investment property you wouldn't have to pay this fee do you?

3) Settlement fee
is this like fee for attending settlement? that's Borrowing Expenses (E)

Any interest charged for the loan can be deducted under Interest (L).

You can't deduct stamp duty that's part of the cap gains calculation.

 

Im so glad you joined the new forum. Welcome

 

Ignore the post above. Its wrong.

1) Bank establishment fee
Not deductible immediately. Deduct as a borrowing cost over loan term or 60mths which ever is shorter. If refinanced later the balance may become deductible at that time.

2) LMI fee
This is also a borrowing exp. See above.

3) Settlement fee, stamp duty, legals on acquisition etc
Capital costs that add to cost base of property and reduces future cap gain.

Tip : Get a QS report unless a QS says its not worthwhile. Don't prepare your own schedule like some fools may suggest.

 

One tick... just gotta put the popcorn on.