Deducting money drawn down from my house to buy IP?

Discussion in 'Accounting & Tax' started by MondeoMan, 29th Dec, 2016.

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  1. MondeoMan

    MondeoMan Well-Known Member

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    I have been doing a lot of reading since joining this forum. I think I have seen that its possible for me to draw down $30,000 I have overpaid on my residential mortgage, use it toward a deposit on an IP and then claim a tax deduction on the interest of that 30,000.. Is that correct? are there any special steps you need to follow or can I just draw it out of the mortgage and into my current account and go from there? How do I show proof of this additional interest expenditure if so?

    Its a way of getting my deducible loan above the 90% the bank will lend me.
     
  2. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    Perthguy likes this.
  3. MondeoMan

    MondeoMan Well-Known Member

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    Thank you, will take a look
     
  4. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

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    Hiya

    It's possible to do - just need to ensure the $30k is set up as a second loan account. That way you can distinguish between deductible and non deductible debt.

    Cheers

    Jamie