Loading
This thread is archived and the information may not be up-to-date. You can't reply to this thread.
varunbondwal(Initiate)Initiate
4 Aug 2024

Hi.

I took a loan to build a house where I started living from January 2022, when the construction completed. This loan included LMI amount of 11k.

I refinanced the loan in August 2022 to take a loan without LMI.

I moved out and rented this property from March 2023 onwards.


So far it didn't occur to me that the LMI amount may be tax deductible. Can someone please tell me if I can claim a portion of it in the 2023-24 financial year?

Also whether I should amend prior year's tax return to claim any part of it deductible over over 2022-23 financial year.


Thanks in advance !

1,492 views
3 replies
1,492 views
3 replies

Most helpful response

Most helpful reply

Taxduck(Taxicorn)Taxicorn
4 Aug 2024

Any deduction for borrowing costs such as LMI can only be claimed off rental income. These costs are claimed over a period of 5 years, or earlier if loan is paid off.

When you refinanced the loan in August 2022 I am assuming the old loan would have been paid off. The new loan has no LMI so there is no expense to claim.

All replies

Most helpful reply

Taxduck(Taxicorn)Taxicorn
4 Aug 2024

Any deduction for borrowing costs such as LMI can only be claimed off rental income. These costs are claimed over a period of 5 years, or earlier if loan is paid off.

When you refinanced the loan in August 2022 I am assuming the old loan would have been paid off. The new loan has no LMI so there is no expense to claim.

  • Avatar of man with black hair and beard
Liked by varunbondwal
varunbondwal(Initiate)Initiate
24 Aug 2024

Hi @Taxduck. Thanks for this reply earlier. Can I please clarify a step further. For the original loan the LMI was added to the loan amount most of which would have carried itself over to the refinanced loan, which was active when rental income was generated. I don't know if loan setup costs contained in the refinanced loan are allowed? - Can you please shed some light. Thanks

Featured articles

Tax tips for managing your side hustle

22 Apr 2024 · 6 min read time

Tax on gifts and inheritances

15 Apr 2026 · 5 min read time

How much tax should I pay on a second job? Claiming the tax-free threshold

15 Apr 2026 · 4 min read time

Top liked users

  1. Bruce4Tax

    (Taxicorn)

    3260 likes

  2. Taxduck

    (Taxicorn)

    2069 likes

  3. PayrollDeanne

    (Taxicorn)

    816 likes

  4. YellowPotato

    (Taxicorn)

    529 likes

  5. knaresbro

    (Devotee)

    364 likes

Top contributors

  1. Bruce4Tax

    (Taxicorn)

    10399contributions

  2. Taxduck

    (Taxicorn)

    4762contributions

  3. PayrollDeanne

    (Taxicorn)

    2061contributions

  4. YellowPotato

    (Taxicorn)

    1352contributions

  5. YEP

    (Devotee)

    837contributions

Loading
LMI calculation for residence converted to investment property | ATO Community