Claim rental property interest correctly
Rental interest deductions are one of the most common things not claimed correctly.
If you bundle rental property loan and include personal items, such as a car or holiday:
- the interest must be apportioned for the cost of those items over the life of the loan, even if those items don’t last the length of the loan
- you can’t just repay the part of the loan relating to the private purchase, even when they refinance.
You also need to apportion claims for interest expenses:
- according to your ownership
- if the property was rented out for part of the year
- when only part of the property was rented out
- if you use the property or kept it vacant for yourself
- if it’s rented at below market rates.