To be able to claim interest costs as a deductible expense on a rental property the money must be raised for the purpose of buying that rental investment.
If I had 20% of the money as cash in my bank and then got another bank to lend me the other 80% to buy a rental property, I assume I could only claim the 80% raised.
If I turned my family home into a rental, and did not structure it correctly I could not claim interest as no loan was raised for the purpose of rental investing.
If I cross securitised my family home and borrowed 100% of the purchase price then I can claim 100% of the interest cost.
BUT:
If my "Rental Trust" borrows 20% of the price from my Family Trust R/C.
And the other 80% is borrowed from another bank (split loan structure).
Can my "Rental Trust" claim 100% of the interest cost as a deductible expense ?
PLUS:
Wait there is more, how do I then treat 20k spent before settlement date (early access) on renovation ?
Can interest on this be included as well (is it capitalised) or it treated as maintenance.
If I had 20% of the money as cash in my bank and then got another bank to lend me the other 80% to buy a rental property, I assume I could only claim the 80% raised.
If I turned my family home into a rental, and did not structure it correctly I could not claim interest as no loan was raised for the purpose of rental investing.
If I cross securitised my family home and borrowed 100% of the purchase price then I can claim 100% of the interest cost.
BUT:
If my "Rental Trust" borrows 20% of the price from my Family Trust R/C.
And the other 80% is borrowed from another bank (split loan structure).
Can my "Rental Trust" claim 100% of the interest cost as a deductible expense ?
PLUS:
Wait there is more, how do I then treat 20k spent before settlement date (early access) on renovation ?
Can interest on this be included as well (is it capitalised) or it treated as maintenance.
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