Need to pay LMI on PPOR to buy our new IP. I will be separating the debt. into 3 loans.
1. PPOR (as amount we currently owe before new purchase) (P&I)
2. Equity used on PPOR to buy IP (interest only)
2. Remainder for IP (interest only)
The LMI for PPOR will go onto loan 2. Can I claim this on tax still does anyone know??
Sorry your acronyms are confusing me, I think you’re referring to your Principal Place of Residence (PPOR)?
I’m no tax expert, but I believe that since the expense will be incurred for the purpose of obtaining an income producing rental property, then yes, you would be able to claim it as a deduction over 5 years.
oops. Yes you are right. I was referring to PPOR. Trying to fit in and got it all wrong
Thanks for your advice RickYou’re doing fine, you seem to have a good understanding of the finance structure
Depends on the set up. I would suggest you get some tax advice before doing this.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Hi Saz
I'm no accountant but I'd assume you'd be able to claim some LMI given the purpose.
Do you have a decent accountant that you can put this question to?
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
A decent accountant is now on my TO DO LIST
thanks guys. My current one has not been very helpful with the property questions.Hi Saz,
I am also no accountant but from my experience, if the LMI is a result of purchasing an IP then it is tax claimable split over a period of 5years. LMI's are considered to be a "loan" in a sense so the repayments are tax claimable. I'd still advise you to see an accountant and double check this.
Cheers,
Dao
It all depends on the circumstances. Borrowing costs are generally deductible over 5 years but if the LMI is incurred on a PPOR secured loan which is increased to access the equity for possible future purchases then it possibly won't be deductible.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Hi Saz
Which city are you in? You might be able to get some recommendations for a decent accountant here. That's not to say that you need to be in the same location as your accountant though – if you're comfortable with phone/email you can choose your accountant from anywhere.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
On the Gold Coast. Thanks Jamie
Saz,
I have a good accountant that I use who is based in Robina if you'd like her details. She is also a property investor. PM me if you'd like her details and I'll pass it onto you.
Cheers,
Dao
Thanks for your advice Rick
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