Hello, I live in NSW and planning to buy an investment property also in NSW
In terms of loan structure I’m looking to take out a second loan based on the equity from PPOR to act as the deposit and pay also for the stamp duty – its almost like a line of credit
I understand that stamp duty paid on title transfer is counted as part of the cost base and the stamp duty on the mortgage can be claimed over 5 years
My question is can I claim the interest on the second loan ie. What was used to borrow to pay for the stamp duty on title transfer because I have used it solely for the purpose of producing income? No private use from this account
Thanks
Hi rc888
Yes interest is deductible based on the purpose the funds are to be used for irrespective of the security used.
Any other loan costs incurred as a result of the equity loan are also deductible over the term of the loan or 5 years whichever is the lesser.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
rc388 wrote:My question is can I claim the interest on the second loanSure can as it's for IP purposes.
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]
Many thanks!
rc388 wrote:Hello, I live in NSW and planning to buy an investment property also in NSWIn terms of loan structure I’m looking to take out a second loan based on the equity from PPOR to act as the deposit and pay also for the stamp duty – its almost like a line of credit
I understand that stamp duty paid on title transfer is counted as part of the cost base and the stamp duty on the mortgage can be claimed over 5 years
My question is can I claim the interest on the second loan ie. What was used to borrow to pay for the stamp duty on title transfer because I have used it solely for the purpose of producing income? No private use from this account
Thanks
Generally yes, but it depends how you structure things.
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
Always think "what is the purpose of these funds"?
If for investment generally it will be deductible regardless of what it is secured against.
Terryw is correct in regards to the structure as it is not always the case.
Colin Rice | CDR Finance
http://cdrfinance.com.au/
Email Me | Phone MePerth Based Mortgage Broker - Investment Property Finance Specialist | E: [email protected]
Hi rc388,
Be very careful how you get that equity released. You want to ensure maximum interest deductibility and that you do not cross-collateralized (ie offer both your home and the new IP as “security” for the one loan). You would be surprised how many people get it wrong. Consider using one of the knowledgeable brokers that have responded to your post. Too often we see people seeking advice on the forums and then trying to teach their local broker. Weird approach. Stick with thosein the know and prosper
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
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