ATO – What attracts our audit attention
To help you taxpayers get things right, you should consider the behaviours, characteristics and tax issues t
You can claim a deduction for borrowing expenses associated with purchasing your property, such as loan establishment fees, title search fees, and costs of preparing and filing mortgage documents. Please note that interest on the loan is not a borrowing expense and can be claimed immediately.
If your total borrowing expenses are more than $100, the deduction is spread over five years or the term of the loan, whichever is less.
If the total borrowing expenses are $100 or less, you can claim a full deduction in the income year they are incurred.
What can you claim?
You can claim all of the following as borrowing expenses:
What are you unable to claim?
You cannot claim any of the following as borrowing expenses:
Stamp duty and legal expenses may be included in calculating the ‘cost base’ of the property for capital gains tax (CGT) purposes.
For further information on what deductions can be claimed for rental properties, download a Griffin & Associates rental property checklist.
Source: Australian Taxation Office