We have a property with a home loan on it at $450k. We plan to build a granny flat second dwelling and rent it out (we are living in the main house). Is the interest on the home loan tax deductible from the granny flat rental income? If so, is all the interest deductible or is a portion based on the floor area: (granny flat area)/(house + granny flat area)? I know it is a floor area ratio for CGT if we were to ever sell, but I couldn't find a clear answer for home loan interest when deducting from the yearly rental income for granny flats. Thanks you
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2,153 views
1 replies