Same Unit. I have an equity line and the unit is the surety over the loan.We paid back the equity loan to 0 dollars.
We then purchased a house that is now our residential home.We borrowed more money on the equity loan to buy the house. We use the equity loan for normal day to day use as well.The unit is now rented out.The unit is still the surety over the loan. Can we claim any interest off the unit for tax purposes or is it not possible because we paid the loan down before?
Question to ask is - "What is the purpose of the funds" and this will determine deductability or not.
Seems the purpose in this case is all personal so based on that premise its non deductable debt.
I would look to split the LOC between personal and PPOR use just in case you rent out your PPOR in the future as the LOC associated with the PPOR may then become deductable.
Yep sorry it sucks but not deductible. When you pay down the loan on an investment property and then use the funds back for personal use then no go on deductibility.
Maybe consider selling the old property, keeping the cash to pay of the home.
Use the home to buy another property. Then you will get the best tax advantages.
At the moment you are going to be stung on Tax because the rental income has no interest offset.