All Topics / Legal & Accounting / Interest deductibility?

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  • Profile photo of GeoffTGeoffT
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    @geofft
    Join Date: 2003
    Post Count: 6

    Where a person’s family home with an existing mortgage on it is simply rented out (ie. it becomes an income-producing rental property and the person moves out and pays rent as a tenant himself elsewhere), is the interest on that loan deductible or does the loan need to be refinanced for the interest to be deductible? (since the original purpose of the loan was to buy a private family residence, not to turn it into a rental property)

    Profile photo of Mortgage HunterMortgage Hunter
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    @mortgage-hunter
    Join Date: 2003
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    The original purpose of the loan was to buy that property. That property is now taxable income producing. As the interest is a cost of producing that income it is now deductible.

    No need to touch the loan for any reason.

    Cheers,

    Simon Macks
    Mortgage Broker
    http://www.mortgagehunter.com.au
    0425 228 985

    Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.

    Profile photo of GeoffTGeoffT
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    @geofft
    Join Date: 2003
    Post Count: 6

    Simon,

    Thanks for clarifying that for me!

    Regards Geoff

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