Hi there,
Myself, my partner and my dad are investing in a rental property together as joint tenants. We will split all income and expenses relating to the property three ways.
Let's say for the sake of this question it's 300k for the property, so we will all contribute 100k each. My partner and I need a loan for our 200k portion, my dad has his 100k in cash.
My partner and I would like to take out a loan for 80% of the property value -- 240k.
Dad's 100k contribution will serve as the 20% deposit of 60k, and the other 40k he contributes we will put immediately into a redraw facility associated with the loan so that my partner and I can use it for a deposit on our next investment property. Because all three of our names will be on the title of the property, all three of our names must be on the loan. However only my partner and I will be paying down the loan as we are borrowing the money to pay for our share of the property.
According to the ATO website, "Interest on money borrowed by only one of the co-owners, which is exclusively used to acquire that person’s interest in the rental property, does not need to be divided between all of the co-owners."
Can my partner and I claim all the interest on our loan as tax deduction?
Thank you.
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