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Atreyudoestax(Newbie)Newbie
24 Apr 2025

we have property A, which we bought and lived in.

we later bought property B and moved into it. property A was leased.

we elected to treat property A as our main residence at all times (<6 years). So we understand that despite it being negatively geared, it won’t attract CGT when sold. Is this correct?


we currently have property B on the market and expect to sell soon. Property B is a CGT asset with no main residence. Can I claim rent/rates/holding costs in my cost base for the sale?


any help is much appreciated

1,198 views
5 replies
1,198 views
5 replies

Most helpful response

Most helpful reply

RachelATO(Community Moderator)Community Moderator
28 Apr 2025

Hi @Atreyudoestax,


Here is some info on deductibility of interest expenses.


If you borrowed to buy a rental property, and it is rented or genuinely available for rent for the entire income year, you can claim a deduction for the interest charged on the loan.


If the purpose of the loan was to buy a private residence, you can't claim the interest.

All replies

Taxduck(Taxicorn)Taxicorn
24 Apr 2025

Cost base elements in link. Any costs that aren't tax deductible can be included. Ownership costs can't be used to create a tax loss.

Cost base of assets | Australian Taxation Office

Atreyudoestax(Newbie)Newbie
24 Apr 2025

This was my thinking.

But it feels "too good to be true" to have interest on both our mortgages be tax deductible (1 against rent, the other through addition to the cost base), so I thought I'd post for feedback

Most helpful reply

RachelATO(Community Moderator)Community Moderator
28 Apr 2025

Hi @Atreyudoestax,


Here is some info on deductibility of interest expenses.


If you borrowed to buy a rental property, and it is rented or genuinely available for rent for the entire income year, you can claim a deduction for the interest charged on the loan.


If the purpose of the loan was to buy a private residence, you can't claim the interest.

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Can i add interest to the cost base of my property | ATO Community