Join Australia's most dynamic and respected property investment community

Borrowing Expenses tax deductible

Discussion in 'Accounting & Tax' started by Paul Luck, 3rd Jul, 2015.

  1. Paul Luck

    Paul Luck Member

    Joined:
    2nd Jul, 2015
    Posts:
    9
    Location:
    Brisbane
    So borrowing expenses for a loan on an IP are tax deductible.

    1. Does this also apply to a loan refinancing not just the initial loan? (The purpose of the refinancing is to extract further equity to be used to purchase PPOR.
    2. Do "borrowing expenses" included all the government fees such as loan registration, loan discharge, title transfer fees etc?
    3. I understand you can't claim the conveyancing fees?
     
  2. D.T.

    D.T. Adelaide Property Manager Business Member

    Joined:
    13th Jun, 2015
    Posts:
    5,566
    Location:
    Adelaide, SA
    1. Yes applies to refinanced as well, but may need to apportion it if ppor is involved

    2. Some of those things mentioned are borrowing expenses and some are capital nature.

    3. Capital nature
     
  3. MikeLivingTheDream

    MikeLivingTheDream BCOM MCOM MTAX CPA CTA Registered Tax Agent

    Joined:
    24th Jun, 2015
    Posts:
    227
    Location:
    Philippines
    Lender's mortgage insurance, valuation fees and loan establishment fees are borrowing expenses for the purposes of section 25-25 of the ITAA 1997.
     
  4. Jess Peletier

    Jess Peletier Mortgage Broker - Australia Wide Business Member

    Joined:
    18th Jun, 2015
    Posts:
    2,756
    Location:
    Perth WA
    If the refinance is to release equity to buy a PPOR, that portion will not be deductible, only the original IP part.