LMI capitalised...tax deduction?

Discussion in 'Accounting & Tax' started by nima__, 16th Jul, 2013.

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  1. nima__

    nima__ New Member

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    Gold Coast, QLD
    Hi
    I have recently bought an investment property where the Lender's Mortgage Insurance was capitalised on the loan. Can I still claim this cost spread over 5 years as a borrowing cost as I did not pay it upfront? And if I can is the interest payable on the LMI still a tax deduction or do I need to work out the interest portion payable on the loan and mortgage insurance?
    Thanks
     
    nima__, 16th Jul, 2013
    #1
  2. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    Yes. You did pay for it - just with borrowed money.
     
    Terry_w, 16th Jul, 2013
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  3. GregReid

    GregReid Well-Known Member

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    Nima,
    you can claim the LMI over 5 years as a borrowing cost in your tax return. You can claim the interest in full on the loan (including the capitalised LMI portion) as a tax deduction also.
    Greg
     
    GregReid, 1st Aug, 2013
    #3