Keep the rental statements, invoices, loan records and dates of rental or private use together. Separate loan interest from principal repayments, and flag any borrowing used for private purposes.
Interest treatment follows the use of borrowed funds; the property securing the loan does not settle deductibility. Mixed-purpose borrowing needs a supported allocation.
Repairs and improvements have different tax treatment. Work fixing damage that existed when you acquired the property is generally an initial repair and capital expenditure, even if you carry out the work later. Do not claim a renovation as an immediate repair deduction without checking its nature.
Ask us to review private use, changes of use and capital costs before finalising the claim.