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Re: Re-Financing Investment Property to Increase Debt

Newbie

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Replies 1

Hi,

 

I have lived in my current PPOR for quite some time now. As such the remaining debt on mortgage is low and my equity is high.

 

I am now looking to move out into a new house get a new home loan and turn my current place into a rental.

This means that the proposed rental investment property will be very postively geared.

 

One broker in particular advised that there was a bank that could organise an arrangement to increase the debt of the original mortgage by borrowing against the investment (original) with an investment loan/rates aka regardless of the purpose (aka using it towards the O/O property).

 

Am I able to confirm that the increased interest derived from the new debt from this method in the investment (original) property is still tax dediductible the same way as a standard home loan/mortgage?

1 ACCEPTED SOLUTION

Accepted Solutions

Most helpful response

Devotee

Replies 0

No it is not tax deductible. The only portion of the loan you can claim as a deduction is for money that was directly used to purchase the rental property or in some cases repairs or renovations. In your case it sounds like the amount owing is low and you can only claim interest on this part of the loan. 

1 REPLY 1

Most helpful response

Devotee

Replies 0

No it is not tax deductible. The only portion of the loan you can claim as a deduction is for money that was directly used to purchase the rental property or in some cases repairs or renovations. In your case it sounds like the amount owing is low and you can only claim interest on this part of the loan.