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Buying Costs - Interest

Discussion in 'Accounting & Tax' started by Frosty123, 25th Nov, 2015.

  1. Frosty123

    Frosty123 Well-Known Member

    Joined:
    12th Nov, 2015
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    55
    Location:
    VIC
    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
     
  2. joel

    joel Well-Known Member

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    Adelaide
    Not an accountant but I'd say yes.
     
    Last edited: 25th Nov, 2015
    D.T. likes this.
  3. Paul@PFI

    Paul@PFI Tax Accounting + SMSF Business Member

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    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.
     
  4. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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  5. Frosty123

    Frosty123 Well-Known Member

    Joined:
    12th Nov, 2015
    Posts:
    55
    Location:
    VIC
    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.