Refinanced - fees tax deductible?

Discussion in 'Loans & Mortgage Brokers' started by world2160, 30th Mar, 2017.

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  1. world2160

    world2160 Active Member

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    I have just refinanced from STG to AMP. There is 2 investment properties and 1 OO in the portfolio. There are fees associated with this refinance, for example valuation fees, security fees.... etc. All up around 2000?

    Are these fees tax deductible? If it is, is it fully expensed or over couple of years?

    I know this is a question for an accountant, but I can't wait until July to know :).
     
    world2160, 30th Mar, 2017
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  2. Paul@PAS

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

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    Deductible over 60 months. ie claim 3 months of 60 this year, 12/60th next etc.... Let the accountant know at tax time and they likely will add a schedule so its not missed for future.

    The fee should also be apportioned across all three loans....Based on the balance at that time. eg

    Loan 1 IP $200K
    Loan 2 IP $200K
    Loan 3 OO $175K

    so 695 would be over 60months for IP1 and same for IP2 and balance is not deductible. This isnt always the case eg if you refinanced again and incurred $500 and it was to get a new loan for a new IP then all the cost may b related to the new IP.
     
    Paul@PAS, 30th Mar, 2017
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  3. tobe

    tobe Well-Known Member

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    If the purpose of these loans was to purchase an investment property, the fees on all of the loans would be deductible?

    If the purpose was to refinance for a better rate on the investment loans, and the rate was only available if the OO came across too, then all of the fees would be deductible?
     
    tobe, 30th Mar, 2017
    #3
  4. Terry_w

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

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    Each loan would be stand alone wouldn't it? If so no apportionment would be needed, you can just claim the costs associated with the investment loan.
     
    Terry_w, 30th Mar, 2017
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  5. Terry_w

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

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    Yes
    No
     
    Terry_w, 30th Mar, 2017
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    Corey Batt and tobe like this.
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