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Tax on rental income

Question:
Can I classify the total monthly mortgage repayment against total monthly rental, or only the interest element?

Arthur Weller Replies:
Only the interest element of the total monthly mortgage repayment can be treated as an allowable business expense to offset against your gross rental income. The remainder is a capital expense that reduces the original debt that you owe the lender, and is not relevant to your rental business.
Can I classify the total monthly mortgage repayment against total monthly rental, or only the interest element?

Arthur Weller Replies:
Only the interest element of the total monthly mortgage
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This question was first printed in Tax Insider in March 2012.