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Claiming interest on refinanced home loan

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We ( me and my partner) bought a property in 2009 with a loan of $400K ( Principal and Interest). We relocated interstate for work purpose in 2017 and rented the property. My current loan amount is around $175K. We together claim tax deductions on interest on current loan amount since it became available for rent.

We are planning to refinance the existing loan and redraw equity credit of around $300K to invest in shares and gold under my partner's name.

Can we claim tax deduction on the interest incurred through refinance against the rental and dividend income?

Do we have to maintain shares investment until the property is paid off?

 

Many thanks and warm regards. 

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Taxicorn

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@dbrightstar 

 

Any interest paid for an income-earning activity is deductible.

 

Sell the shares and you no longer can deduct the interest.

 

Be aware of the breakdown between the investment property and share interest ratios e.g. Investment property = 75% and shares = 25% because if you sell the shares you will then only claim 75% interest for the investment property.

 

The shares interest is only claimable by your partner.

 

 

1 REPLY 1
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Best answer

Taxicorn

Replies 0

@dbrightstar 

 

Any interest paid for an income-earning activity is deductible.

 

Sell the shares and you no longer can deduct the interest.

 

Be aware of the breakdown between the investment property and share interest ratios e.g. Investment property = 75% and shares = 25% because if you sell the shares you will then only claim 75% interest for the investment property.

 

The shares interest is only claimable by your partner.