I have approx $500,000 sitting in my offset account for my own home (about 90% of my loan is offset). I don't currently have any investment property. My question is: If I buy an investment property using this cash can I claim the interest payable as a tax deduction? Intuitively, I could get a new loan/mortgage on the investment property and be able to deduct the interest, so the net effect would be the same as if i simply withdraw from the offset.
Interest on a loan to purchase a property is deductible off rental income. Withdrawing money from the offset account would be considered as a new loan. See information on interest.
Interest on loans | Australian Taxation Office
This link is useful as well.
Rental expenses you can claim now | Australian Taxation Office
Interest on a loan to purchase a property is deductible off rental income. Withdrawing money from the offset account would be considered as a new loan. See information on interest.
Interest on loans | Australian Taxation Office
This link is useful as well.
Rental expenses you can claim now | Australian Taxation Office
If I buy an investment property using this cash can I claim the interest payable as a tax deduction?
No, because you are not borrowing - just taking cash out of a bank account.
ATO answer here:
https://community.ato.gov.au/s/question/a0J9s000000OJej/p00199744
15 Apr 2026 · 4 min read time
15 Apr 2026 · 8 min read time
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