Tax Tip 33: Deductibility of LMI

Nice but are you asking a question?

 

These posts are related to this thread too:

Tax Tip 34: Deductibility of LMI on loan increases Tax Tip 34: Deductibility of LMI on loan increases

Tax Tip 35: Is LMI Deductible in These Situations? Tax Tip 35: Is LMI Deductible in These Situations?

 

@Terry_w - My land settled in last FY and construction is in progress now.
I think I can't claim any interest paid on Land loan until my build is completed and advertised for rent.

For this IP I have paid LMI of around $1500. Would I be able to claim 20% of this in tax or I can only do this in next FY?

Also, in my circumstance I'm really not sure on what I can claim in tax returns and would be great if you guide me here?

 

You could never claim 20% in the first year unless the loan settled on 1 July perhaps.
Now individuals cannot start claiming anything until the completion of the building and it is available for rent.

 

Review of the date the property was contracted to acquire may mean that the interest and holding costs are deductible in the 2020 year if the acqusiition was prior to 1 July 2019.
Tax advice needed.

 

I have an investment property that I paid LMI on buying it at 88% LVR.

About 9 months later I refinanced the loan to another lender, the valuation went up so no LMI needed since under 80% LVR. Refinance was in a new financial year since purchase though.

Is LMI instantly deductible? I haven't done my taxes yet. Can I deduct for last FY or do I need to wait til July?

 

The initial element will be based on 60mths. Then the refinance will be a trigger for the balance if its a new lender and remains a IP when that occurred. So the full amount may span 2 tax years

 

Yes if the same financial year you could claim all of it. It it cross 2 years you would have to claim 6 months of 20% and then the rest the following year