Important Considerations
The rules around interest deductibility still contain nuances that all landlords should be aware of and we recommend you seek professional advice , particularly if some of the following components relate to your property :
• Other Exemptions : There can be various other exemptions in place relating to interest deductibility , depending on the circumstances . These can include exemptions for property development , emergency housing , new build properties , and different ownership entities .
• Loan Allocation : If you have a mortgage covering both your rental property and personal use , you must correctly allocate the interest portions for each to ensure you only claim deductions for the interest related to your rental property .
• When a property is sold : The rules for disallowed interest deductions when a property is sold are remaining . This means , if the sale of a property is taxable under the bright-line property rule or 1 of the other land sale rules , the amount of the previously disallowed interest can be treated as if it were part of the cost of the property in the year you sell it .
• Main Homes : Your main home and place of residence remain unaffected by any interest deductibility changes , and you cannot deduct interest on a property used for private use .
General Advice
Interest deductibility can have a significant impact on the financial performance of your investment property and your overall tax costs . We recommend keeping detailed and accurate records of all transactions relating to any property-associated lending and seeking professional advice to achieve the best financial outcome for you .
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