Claiming fixed interest break fees

Discussion in 'Accounting & Tax' started by smallbuyer, 31st Aug, 2017.

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  1. smallbuyer

    smallbuyer Well-Known Member

    Joined:
    25th Jun, 2015
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    405
    Location:
    WA
    Hello,

    If you break a fixed rate for your rental property (to get a better rate not when you sell the property) can you claim the complete break cost immediately or does it need to be spread over 5 years like loan setup costs. Or can you choose?

    Cheers

    Smallbuyer
     
    smallbuyer, 31st Aug, 2017
    #1
  2. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    Depends.

    If you break while its a IP fixed to variable for example its straight deductible PLUS any remaining borrowing costs are also now deductible. If you plan to sell strategy is break while tenanted NOT when loan is repaid or when you move into the former IP as that would make its a CGT cost...50% loss of benefits
     
    Paul@PAS, 31st Aug, 2017
    #2
    Terry_w likes this.
  3. smallbuyer

    smallbuyer Well-Known Member

    Joined:
    25th Jun, 2015
    Posts:
    405
    Location:
    WA
    Thanks Paul, definitely a clever thing to do before you sell.
     
    smallbuyer, 1st Sep, 2017
    #3