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mogobob(Initiate)Initiate
16 July 2024

Hi there


I know that borrowing expenses for an investment property are deducted over 5 years. Suppose I take out a loan and incur some borrowing expenses. After two years, I decide to refinance and change bank.


There are still three years left of borrowing expenses that haven't been deducted yet from the original loan. Do those remaining expenses continue to get deducted over the three remaining years, even though I am no longer with that bank but with another bank?


Thanks

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1,363 views
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Taxduck(Taxicorn)Taxicorn
16 July 2024

From ATO on borrowing expenses.

"If you repay the loan early and in less than five years, you can claim a deduction for the balance of the borrowing expenses in the year of repayment."

I assume by refinancing with another bank you will be paying out the old loan. See link.

Borrowing expenses | Australian Taxation Office (ato.gov.au)

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Borrowing expenses deducted over 5 years when changing loans | ATO Community