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LMI capitalised...tax deduction?

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

  1. nima

    nima New Member

    Joined:
    16th Jul, 2013
    Posts:
    1
    Location:
    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
     
  2. Terryw

    Terryw Well-Known Member

    Joined:
    9th Jun, 2006
    Posts:
    653
    Location:
    Sydney
    Yes. You did pay for it - just with borrowed money.
     
  3. GregR

    GregR Reid Consultants

    Joined:
    13th Jul, 2009
    Posts:
    273
    Location:
    Berwick Vic
    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