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Investment property refinance

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Hi
I am looking at buying a home to live in.
I currently have an investment property that I rent out.
My mortgage broker has suggested I increase refinance the loan on my investment property to provide extra funds for the purchase of my home to buy and live in. I currently rent a room in someone else’s home.
My question is
If I increase the loan on my investment property by say 50k to use to put towards buying a home to live in. Will the interest on this extra 50k on that loan for the investment property be tax deductible?
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Devotee

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No. As the $50k is being used for personal (non income producing) use. And worse still you will have created a mixed purpose loan which requires you to correctly proportion interest and repayments as per TR 2000/2. https://www.ato.gov.au/law/view/pdf/pbr/tr2000-002.pdf

For simplicity you should keep the investment proportion of the loan seperate from any amount for personal use. Like using a split loan.

It maybe advisable to get a second opinion from another mortgage broker one that is more familiar with investment loans. Also an accountant too.
1 REPLY 1

Best answer

Devotee

Replies 0

No. As the $50k is being used for personal (non income producing) use. And worse still you will have created a mixed purpose loan which requires you to correctly proportion interest and repayments as per TR 2000/2. https://www.ato.gov.au/law/view/pdf/pbr/tr2000-002.pdf

For simplicity you should keep the investment proportion of the loan seperate from any amount for personal use. Like using a split loan.

It maybe advisable to get a second opinion from another mortgage broker one that is more familiar with investment loans. Also an accountant too.
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