Debt recycling and tax deductability

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Taxduck · Answer

Your understanding is spot on. Costs of borrowing money to purchase an income producing investment asset is a deductible expense. Interest is one of those costs. How you structure your loans is not relevant. This ATO information on interest on loans may be useful Interest on loans | Australian Taxation Office (ato.gov.au) (https://www.ato.gov.au/individuals-and-families/your-tax-return/instructions-to-complete-your-tax-return/mytax-instructions/2019/income/australian-income-or-losses-from-investments-or-property/rent/rental-expenses/expenses-for-which-you-can-claim-an-immediate-deduction/interest-on-loans)

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