Let's say I purchase an investment property in an all-cash deal, so no mortgage. Later I decide to take out a mortgage on the investment property. Can I claim loan interest as an expense after I take out this new mortgage on the investment property?
Someone else said that I could only claim loan interest as an expense if the investment property is purchased with a mortgage before the settlement date. If true this seems to be an odd restriction to me.
Can I claim loan interest as an expense after I take out this new mortgage on the investment property?
Not if the loan was for something other than the property purchase
Someone else said that I could only claim loan interest as an expense if the investment property is purchased with a mortgage before the settlement date.
Yes - because the purpose of the loan was for acquiring the property.
If true this seems to be an odd restriction to me.
Perfectly logical - purpose of the loan, and application of the loan funds, controls deductibility of interest
Can I claim loan interest as an expense after I take out this new mortgage on the investment property?
Not if the loan was for something other than the property purchase
Someone else said that I could only claim loan interest as an expense if the investment property is purchased with a mortgage before the settlement date.
Yes - because the purpose of the loan was for acquiring the property.
If true this seems to be an odd restriction to me.
Perfectly logical - purpose of the loan, and application of the loan funds, controls deductibility of interest
This question, and others similar, have been asked many times in this forum.
Perhaps the search button should be more prominent.
I agree with @Bruce4Tax. He frequently gives good answer/s.
But, you could possibly claim a tax deduction if the borrowed funds are used for business or investment purpose/s.
You really should have a meaningful discussion with an experienced accountant.
Ask your friends and colleagues to recommended a Chartered Accountant, CPA, or Chartered Tax Adviser.
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).
21 May 2026 · 4 min read time
15 Apr 2026 · 8 min read time
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