Sunshine Coast Region, Queensland
Tax Accountant in Maroochydore
The redraw that changed the interest claim, and the return that needs fixing
Individual and investor tax returns for Maroochydore property owners, and amendments for sole traders, from a CPA practice.
Maroochydore had 20,629 residents in the 2021 Census, and 42.1% of its occupied homes were rented, against 31.5% owned outright and 21.7% owned with a mortgage. Flats and apartments made up 36.6% of homes. Behind those rented homes are owners with loans, and the way a loan is used decides how much of its interest can be claimed.
Maroochydore in brief
The black swan town.
Andrew Petrie gave the area its name in 1842, from the Yuggera word for the black swan. Horton Parade is the heart of the CBD, near Sunshine Plaza and the Coast's main bus interchange. In 2021, 34.3% of the suburb's households were one person and the median weekly rent was $410.
Three questions for investors and sole traders
Interest on a loan used for more than the rental
Why it happens
An investor borrows to buy a rental unit, then uses the same loan for a car, a holiday or the family home.
Why it matters
Interest is deductible to the extent the loan is used for the rental. If part of the loan, or the property itself, is used privately, the interest must be apportioned, and the loan becomes mixed purpose. Repayments on a single mixed-purpose loan can't be directed to the private portion; they are applied proportionately to each purpose.
How we help
Lomandra Accounting keeps your records accurate, your deadlines met and your options easy to understand. Keep the loan statements that show every drawdown and what it was for.
Redraws
Why it happens
An owner pays extra into the rental loan, then redraws it later.
Why it matters
The ATO treats a redraw as a new borrowing. If the redrawn money is used for something private, the interest on it is not deductible, even though it sits in the rental loan account.
How we help
Consider a separate loan for private spending rather than redrawing from the rental loan.
Fixing a return after it has been lodged
Why it happens
A rental expense, a capital gain or an income statement is found after the return has gone in.
Why it matters
Individuals generally have 2 years from the day after the notice of assessment to request an amendment. Sole traders have 2 years for 2023-24 and earlier, and 4 years for 2024-25 and later years. Wait until the original return is processed, then amend through ATO online services or the ATO app; online amendments take about 20 days. After the time limit, an objection may be needed instead.
How we help
Note the date on each notice of assessment so you know when the window closes.
Frequently asked questions
Can I claim interest on my Maroochydore rental loan if I redrew some of it?
Only on the part of the loan used for the rental. Interest on redrawn money used privately isn't deductible.
How long do I have to amend my tax return?
Generally 2 years from the day after your notice of assessment. Sole traders have 4 years for 2024-25 and later income years.
Can I pay off just the private part of a mixed loan first?
No. On a single mixed-purpose loan, repayments are applied proportionately to the rental and private portions.
Where to next
Have a question?
Before you redraw
Personal Accounting Services on the Sunshine Coast.
Lomandra Accounting is a CPA Practice, registered with the Tax Practitioners Board and an SMSF Specialist. Emma, the Director, is a Certified Practicing Accountant (CPA) with extensive experience in commercial business management, and specialises in Self-Managed Super Funds (SMSFs).
- 07 5234 9201
- admin@lomandraa.com.au
- Sunshine Coast, QLD
- Monday to Friday, 9am to 4:30pm