Join Australia's most dynamic and respected property investment community

Refinancing Cost

Discussion in 'Accounting & Tax' started by Balman, 6th Feb, 2016.

  1. Balman

    Balman Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    118
    Location:
    Perth
    Hi

    just wondering how costs involved when moving from one lender to another are treated? are they deducted in the year of occurrence or capitalised or otherwise?

    Thanks
     
  2. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

    Joined:
    18th Jun, 2015
    Posts:
    8,970
    Location:
    Sydney
    Depends what sort of costs, whether the loan related to the production of income and whether there was any other purpose.

    Assuming relating to an investment property with no mixed loan purpose:
    Discharge of mortgage would be deductible in full

    Break costs for fixed loans would generally be deductible in full

    Application fees, LMI and other borrowing costs would be a borrowing cost and deductible over 5 years
     
    Balman likes this.
  3. Balman

    Balman Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    118
    Location:
    Perth

    hi

    The costs involved are discharge and registration of the mortgage per investment loan. Leaving Westpac costs and settlement cost with the new bank. Would these all be deductible in the year of occurrence or otherwise? Cannot seem to find and clear guidance on the auto site.

    Thanks