L Did you have any interest on loans?
This information may not apply to the current year. Check the content carefully to ensure it is applicable to your circumstances.
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Calculate your deductible interest expenses and write the amount in the boxes provided. Do not show cents.
What you need to know
If you took out a loan to purchase your rental property or to finance the cost of repairs or renovations to your rental property, you may claim the interest on that loan as a deduction for the period during the year the property was used or held for income-producing purposes (for example, when it is rented or available for rent or undergoing repair or renovation for the purpose of making it available for rent).
If you cease to use the property for income-producing purposes, the interest on the loan will no longer be deductible.
If only part of your loan was for your rental property, you can only claim the interest for that part-see example 1 in these instructions. You can also refer to the apportionment examples in the booklet Rental properties for further guidance.
Do not include the following in this category:
- interest on loans taken out to purchase depreciating assets for your rental property-for example, a refrigerator (include such amounts at label V Sundry rental expenses)
- borrowing expenses which are directly incurred in taking out a loan for the property (see label F Borrowing expenses, above, and include such amounts there).
Claiming prepaid interest
If you prepay interest covering a period of 12 months or less and the period ends on or before 30 June in the income year following the payment, you can claim an immediate deduction. Prepaid interest that doesn't meet these criteria and is $1,000 or more may have to be spread over two or more years -see the publication Deductions for prepaid expenses.
Last modified: 20 Oct 2015QC 27495