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**Damap** · 24-09-2015, 11:11 PM

Totally depends on your accountant. I have heard all sorts of different takes on it ranging from claim it all if you aren't going to live there long term through to all variations of splits.

**Rosco** · 25-09-2015, 07:19 AM

Originally posted by Jerk View Post

Lets say I own a house with a minor dwelling on it. I live in the minor dwelling and rent the main house. How does this work for expenses? Is a portion of the interest tax deductible? A portion of rates etc? How would the % be calculated? Or is it just a flat no.
I'm just after experiences or rough thoughts as I'm not in this situation yet (and would seek proper advice closer to the time).

Any input appreciated.

Hi Jerk,

there are some different ways you could look at this, but also some black and white.

1) the interest is deductible if used to buy the rental. So
- if you buy house debt free. Then borrow $180k to build minor dwelling. As the $180k debt is for the house you are living in, then no interest deduction!
- if you buy whole thing completed, then you would apportion the interest between the rental and private, so a portion of the interest would be deductilbe

2) insurance, repairs, chattels depreciation and any other expenses directly relating to the house rented would be deductible

3) apportioning other expenses between rental and personal. Generally you would base on value. So if whole place worth $500k, and rental was $300k of this, then you would claim 60% of rates for example. You can either get these values from a valuation, and you might have to split the land value based on size.

Ross

**Jerk** · 30-09-2015, 10:16 PM

Thanks for replies, very informative and exactly what I was after.

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Expenses for minor dwelling.

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