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Akcquestions(Newbie)Newbie
20 Apr 2025

Hi, just wondering if we can refinance an existing investment property loan to increase the LVR and use that cash to buy a new investment property? The purpose of the additional funds would be to generate income by using the funds as a deposit and to pay costs of the second investment property. My understanding is that we can do this and still claim the interest as a deduction as the purpose of the loan/money is to generate income. Is that correct? Thank you

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114 views
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YellowPotato(Taxicorn)Taxicorn
20 Apr 2025

Yes, the new money used to purchase the 2nd property would be deductible. Whether or not it is a rental deduction or cost base depends on the property use. You would need to make sure you apportion the interest charged to the respective properties or have separate loan accounts.

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Increasing investment property loan LVR to buy new investment property | ATO Community