Bank Refinance Fees for an IP - Are They Tax Deductible?

Lunarboogie on 05/03/2021 - 12:23

Hi brains trust

I am refinancing my investment property mortgage to ANZ from another big 4 bank. Some of my reasoning is to get a better rate (though at .04 difference, it's marginal), but the main motive is to pocket the $3000 bonus. I then plan to flit between the two banks annually and pocket a few grand each time - a no brainer really.

In doing so, however, I'll be hit with about $900 in fees to switch banks. As it is an IP, bank charges are usually deductible. Can anyone shed light on whether the refinancing fees would also be seen in the same light. My instincts say yes - but I'd be more comfortable to hear what has been the experience from others.

Thanks!

Financial

Comments

  • Seraphin7 on 05/03/2021 - 12:36
    +9

    Would you consider the $3k bonus as income on your tax return???

    • Lunarboogie on 05/03/2021 - 17:25

      Ah that was going to be my next question. What have others done?

      • whooah1979 on 06/03/2021 - 07:53
        +1

        The bonus isn't taxable income.

    • SBOB on 06/03/2021 - 13:13

      This
      If the interest on the investment loan offsets your taxable income, any bonus cashback should certainly be counted as positive income in that calculation

      • Lunarboogie on 12/03/2021 - 16:05

        You could be right. But with the ATO's focus on jobkeeper et al, I might hold back from adding to their woes and keep mum. I'd be very surprised if anyone on this site adheres to the red letter of the law and judging by the interest in these refinance offers, a lot of people seem to be taking them up.

  • Htu08 on 05/03/2021 - 13:37
    +2

    https://community.ato.gov.au/t5/Investment-property/What-ded…

    Not tax advice, Speak to your accountant.

    • Lunarboogie on 05/03/2021 - 17:27

      Thank you. Very helpful - looks like my instincts were correct.

  • bemybubble on 05/03/2021 - 14:42
    +1

    Borrowing costs are amortised over 5 years

Login or Join to leave a comment
Login Join