Hi,
I currently live in a property in NSW which I purchased in 2019 (with my wife as joint tenants) and have resided in as owner-occupiers ever since. I am considering buying a new home to live in and converting my current home into an investment property. There is an existing mortgage on my current home, which I would likely seek to increase in order to buy the new home. There would also likely be a smaller mortgage on the new home. If I do this, will 100% of what is owing on my current property (i.e. what will become the investment property) be for investment purposes (i.e. the interest on the loan and other expenses associated with the property be tax deductible)?
To be clear, I don’t currently have any investment property.
Alternative scenario: If the answer to the above is that it will not be 100% tax deductible, then say we waited until we pay off the existing mortgage before doing this, then borrow against the current house to buy a new one (again, with the current home becoming an investment property). Is the answer the same (I.e. that none of it will attract deductions)?
Thank you.
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