Soaring interest rates will push taxpayer support for the nation’s 2.4 million landlords to record levels as deductions offered for borrowing costs surge above $7 billion a quarter.
Both landlords who negatively gear their properties, and those who make an income from their rentals, claim interest deductions. At that level, the interest bill on a $600,000 mortgage will have increased by more than $10,000, which investors would be able to claim as a tax deduction.CPA Australia senior manager of tax policy Elinor Kasapidis said the increase in interest rates would flow directly through to the federal budget bottom line.
In the first three months of this year alone, investors paid a record $7.1 billion in interest. That interest will be deductible for tax purposes. Total repayments also reached a record $10.9 billion.