Forums / Getting Technical / Finance / IP Loans and Tax Deductability.

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  • Profile photo of casperamcasperam
    Participant
    @casperam
    Join Date: 2012
    Post Count: 4

    Hi Guys

    Many years ago when I started out on my property investing path I had a PPOR which had a regular mortgage against it.
    I then used the equity to have two further mortgages to purchase two investment properties.
    In recent times I have since paid off the original mortgage which I did not claim for tax purposes leaving just the two loans off which all the funds were used to purchase those IP’s and have been tax-deductible.

    In recent times I have been in consultation with my bank about fixing those two loans.
    I was told that I could get a lower rate if those loans were classified as owner-occupier as they are currently as investment property loans.
    Question
    Will it be OK to change the loan classifications to owner-occupier loans take the lower rate and claim the interest as tax-deductible as long as I can show justification that funds were used appropriately?

    Thanks

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,173

    Deductibility depends on the use to which borrowed funds are put, not what you tell the bank.

    Terryw | Structuring Lawyers / Loan Structuring Pty Ltd
    http://propertytaxbook.com.au/
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

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