John is intending to negatively gear the purchase of a residential investment property. The property will be rented out and hopefully achieve some capital growth in the longer term. John has identified a potential property for purchase which is immediately rentable but could do with some work to gain better returns. John would like to ensure the most tax effective outcome of his investment.
If John takes out a loan to fund the purchase of this property, he can claim deductions for the interest paid in the year the property becomes available to rent. For deductibility purposes, it is imperative that a separate loan is taken out for the investment as compared to redrawing on private finance such as your principal place of residence home loan.
If you have questions please contact Andrew Marshall or Janine Orpwood at Langley McKimmie Chartered Accountants on (03) 5427 8100 for an initial consultation.
We provide accounting and wealth management services to clients in Woodend, Gisborne and Macedon Ranges areas within Victoria Australia.