Using refinanced money to pay stamp duty

I am looking at using refinanced money to pay stamp duty, solicitor cost and my portion of rates. Is the interest of the refinance loan still tax deductible?Thanks

 

It could be depending on the circumstances and how it is done

 

"My Portion"...what does that mean ?

 

As long as the loan has been set up correctly, this should be fine assuming you're buying an IP. The loan structure is the key here - the extra funds you're using for deposit etc should be in their own loan split, rather than lumped in with the original loan.

 

How is your loan set up Mark?

If it’s a nice/clean structure where the “refinanced” funds are sitting in a seperate loan account that’s devoted to “investment purposes” then all should be ok.

If the funds are simply being redrawn from an owner occ loan then you’ll have issues

I’m not an accountant though so can’t advise on such a complex issue....seek pro advice and all that.

Cheers

Jamie

 

Hi Paul, "my portion" means the amount of council and water rates I need to pay at settlement. I use refinanced money from an existing investment property to pay the initial costs of another investment property. Is the interest of the refinance loan for paying stamp duty, solicitor costs and council/water rates tax deductible?

 

Thanks, Terry, Jess, Jamie and Paul.

 

This doesn't make sense - grammatically or logically. Do you mean you borrowed money? If so how was it structured?

 

If you borrow money to pay settlement costs for an income producing asset, and those borrowings subsequently incur interest, you will normally enjoy a tax deduction for the interest incurred.

You should avoid the temptation to mix loans together for different uses.

I am not sure if that helps answer your question.