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_Jbvjbgn(Newbie)Newbie
28 Aug 2021

Say I have a single mixed purpose loan of $400K where 80% is tax deductible and 20% is non tax deductible.

I then refinance the loan with another lender with split loans of 85% and 15% . This is so I can pay down the non deductible debt easier and not have the principal apportioned between deductible and non deductible.

Does the ATO automatically accept the new splits when a refinance has taken place?

Or am I now stuck with 1 split loan being non tax deductible (15%) and the 2nd loan is still a mixed loan of being (85%) and In order to fix it I have to split this loan into ( 80%) and (5%)?

1,528 views
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1,528 views
1 replies

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Most helpful replyATO Certified Response

JodieR_ATO(Community Support)Community Support
ATO Certified Response1 Sept 2021

Hi @Jbvjbgn,

What we look at is the use of borrowings, If you increased your loan against the tax deductible amount to pay down the non tax deductible amount, you cannot claim the interest portion on this. As the borrowings have been used for a non tax deductible/ personal use purpose. You can view information on this under interest deductions.

If you have further questions, please let us know.

All replies

Most helpful replyATO Certified Response

JodieR_ATO(Community Support)Community Support
ATO Certified Response1 Sept 2021

Hi @Jbvjbgn,

What we look at is the use of borrowings, If you increased your loan against the tax deductible amount to pay down the non tax deductible amount, you cannot claim the interest portion on this. As the borrowings have been used for a non tax deductible/ personal use purpose. You can view information on this under interest deductions.

If you have further questions, please let us know.

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