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Becco(Newbie)Newbie
24 Jan 2024

Hi 👋

We are looking to refinance our loans and just wanted to double check-

If we have a current loan on our investment property for say $350,000 can we increase this amount when we refinance? Say increase it to $400,000? Would we still be able to claim the full interest as a deduction come tax time?

The $50k would not be used directly for the investment property itself but for paying off a seperate home loan.

Note: The market value of property would be about $650k.


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2,286 views
1 replies

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Most helpful reply

Ken_Oath(Master)Master
24 Jan 2024

This is perhaps the most common mistake made by property investors.

Security is only relevant for bankers (with a B), not for taxes.

To determine whether interest is tax deductible, you only need to consider the purpose the funds were used for.

So no, you won't be able to claim tax deductions for all the interest on your $400,000 loan.

There are other ways to solve your problem.

You really should have a meaningful discussion with an experienced accountant.

S/he can describe and discuss the many relevant taxing issues, and help you conclude good outcome/s.

Don't forget that any "free advice" you receive in this forum, is worth what you paid for it, ie nil (GST included).

All replies

Most helpful reply

Ken_Oath(Master)Master
24 Jan 2024

This is perhaps the most common mistake made by property investors.

Security is only relevant for bankers (with a B), not for taxes.

To determine whether interest is tax deductible, you only need to consider the purpose the funds were used for.

So no, you won't be able to claim tax deductions for all the interest on your $400,000 loan.

There are other ways to solve your problem.

You really should have a meaningful discussion with an experienced accountant.

S/he can describe and discuss the many relevant taxing issues, and help you conclude good outcome/s.

Don't forget that any "free advice" you receive in this forum, is worth what you paid for it, ie nil (GST included).

Liked by Ken_Oath

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When I refinance can I increase the loan amount on investment loan? | ATO Community