Private ruling: Deductions
Date of advice: 25 July 2025
Published: 29 September 2025
Ruling period: Year ended 30 June 20XX | Year ended 30 June 20XX
Date scheme commenced: XX July 20XX

Ruling: Q1: Are you entitled to a deduction for the full amount of the interest you incur on the loan used to acquire the Property? | A1: Yes. The borrowed funds from the loan account have been wholly used to fund the purchase of the Property which you are renting out. Withdrawing funds from your offset account for private purposes does not change that the loan account has been used solely for income producing purposes.

Relevant facts and circumstances: In approximately late 20XX/early 20XX, you purchased a property in your sole name (The Property). The Property is rented out. You obtained finance from a bank to fund the purchase of the Property. Your facility includes a home loan and an offset account. These are in your sole name. The funds from the home loan were used to purchase the Property. You keep the offset account in credit and make withdrawals for private purposes. You incur interest expense on the home loan. The amount of the interest is based on the net balance of the two accounts.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 8-1