I am continually surprised that some clients risk losing valuable tax refund dollars by not having the right loan structure.
Don’t get caught out with this simple error! Keep a clear distinction between loans or splits that are for personal purposes and those for investment or deductible debt.
And remember it is the loan purpose not the property that creates the deductibility, so if you borrow against your own home to provide the equity for an investment property then the interest component of that portion will be deductible, however if you get a loan increase against your investment property for a family holiday then this obviously is not deductible.
Never, ever, ever draw down on a loan for a mix of personal and investment debt as you may find that none of the debt is deemed as deductible by the ATO.
It’s not rocket-science just keep the expenses separate and don’t redraw or offset a mix of both personal and investment expenses.
By the way this is a tip not advice, so always seek your own advice from your accountant!