All commercial finance products have tax deductible components but the tax benefit is realised in differing ways. Leasing and Rent-to-Own are off balance sheet finance products as the equipment remains on the balance sheet of the lender and is leased/rented to the borrower in the monthly payment. The monthly repayments are treated as an operating expense and are fully tax deductible, including the interest. With Chattel Mortgage only the interest portion of the repayments is tax deductible. The borrower realises a tax benefit on the purchase price when the equipment is depreciated each year when the income tax return is prepared, in line with the relevant ATO guidelines.