Upcoming Tax Deductibility Change: Time to refinance ATO debt?

FROM 1 JULY INTEREST ON ATO DEBT WILL NO LONGER BE TAX DEDUCTIBLE

This change could significantly impact business cash flow and overall tax strategy.

As a result, it’s more important than ever to consider alternative financing options that could reduce your interest costs and in some cases, restore the tax deductibility of the debt.

If you own property with available equity, there may be an opportunity to refinance your ATO debt into a home loan. The benefits include:

• Lower interest rates – potentially reducing from ~11% (ATO) to ~7%

• Potential tax deductibility – depending on structure (confirm with your accountant as debt related to personal tax debt is not tax deductible)

• Improved cash flow – longer loan terms up to 30 years.

Lenders also offer flexible loan options in regards to documentation required. This can range from Full Doc Loans (full tax returns and financials) to Alt Doc Loans (BAS, bank statements, accountant/client declarations).