Buying Costs - Interest

Hi all,

I recently released equity in my property, and had the funds drawn down into a new offset against a new loan.
I plan on paying the 20% deposit for a new IP using these funds.
With the leftover money in the offset, can I use it for the following, and still be able to deduct 100% of the interest incurred on the loan:

Building and Pest
Stamp Duty
Solicitor's Fees
Loan Application Fees etc.

Thanks

Frosty

 

Not an accountant but I'd say yes.

 

I am an accountant and I say maybe. Depends what you do with the new acquisition (rent it ?) and if the offset had other $ in it or the loan is blended between the old IP and the new costs.

If its blended a % of the interest will be deducted against the old IP and a % against the new IP.

 

I am a tax lawyer and also say 'maybe'. see
Tax Tip 1: Parking borrowed money in an offset account

https://propertychat.com.au/community/threads/tax-tip-3-mixing-loans-dont-do-it.1517/

Tax Tip 4: Borrowing to Pay investment expenses

 

Thanks guys.
The offset account was created with the loan and only has funds that were drawn down from the equity. The property will be on the market to rent out after settlement.
Sounds like these buying costs can be taken from the leftover funds in the offset.