Hi,
I recently refinanced my 1st investment property which initially was a single P&I loan to obtain some equity funds and now I'm in the process of buying the 2nd investment property. The new loan structure from my 1st investment is now two separate interest only variable loans, the first being the inital loan and the second an equity loan.
My question is, can I immediately claim the interest on the equity loan as it was refinanced from an income producing asset, or can I only claim the interest on the equity loan from the date I settle on the 2nd investment property, using the equity funds to purchase the new income producing asset?
I understand that if the equity loan was obtained by refinancing through a PPOR I could only claim interest on the equity loan from settlement date on the new investment property. However, since it was obtained by refinancing through an existing investment property which is already producing income does this change?
Otherwise there is a lag time between receiving the equity loan and settling on a new property, and this time period will be accruing interest on the equity loan that might not be tax deductible.
Hope this makes sense and thanks in advance!!
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