All Topics / Legal & Accounting / Borrowing Costs

Viewing 1 post (of 1 total)
  • Profile photo of AmandaBSAmandaBS
    Join Date: 2005
    Post Count: 549

    We’ve just added a new document to our site on Borrowing costs so I thought I’d share it with you all.

    Borrowing Costs

    Under Section 25-25 of the Income Tax Assessment Act you can deduct expenditure incurred for borrowing money, to the extent that the borrowed money is used for the purpose of producing assessable income.

    What is classed as a Borrowing Cost?

    Loan establishment fee
    Mortgage registration fees
    Title search fees
    Mortgage brokers fee/commission
    Stamp duty on the mortgage
    Valuation fee charged by the lender
    Lenders Mortgage Insurance (LMI)
    Legal costs in relation to the mortgage
    Underwriter’s fees

    How do I claim Borrowing costs in my Income Tax Return?
    Your Accountant will calculate this for you. In most circumstances the total sum of all borrowing costs is spread over the period of the loan or 5 years, whichever is the shortest. So if you repay/refinance the loan within 5 years, then the remaining balance of the borrowing costs are claimed in that year. Borrowing costs not exceeding $100 are fully tax deductible in the year in which they are paid.

    To see an example of how it is calculated:


    FREE online Property Resources

    “It is better to be inconspicuously wealthy, than to be ostentatiously poor…”

Viewing 1 post (of 1 total)

You must be logged in to reply to this topic. If you don't have an account, you can register here.