Under ATO guidelines, loan interest is tax-deductible based on how the loan funds are used - not which property the loan is secured against.(Source: ATO – Rental Expenses)
In TaxTank, you’ve got two ways to apportion interest across properties:
Split Function
Set a fixed percentage split for the interest (e.g. 30% to Property A, 70% to Property B).Auto-Allocation Rules
Create rules to automatically allocate interest based on keywords, payees, or transaction amounts.
To make sure your interest is apportioned correctly, set up custom bank rules for each property the loan was used to purchase or improve. Here’s how:
Head to Bank Feeds and find a recent interest transaction for the loan.
Click “Create Rule” on that transaction.
Fill in the rule details, making sure to set the correct percentage for the property (e.g. 90%), then save.
Go to the Bank Rules tab (top right in Bank Feeds).
Click “Create New Rule” again and set up a rule for the other property, using the remaining percentage (e.g. 10%), then save.
Once both rules are set up, you can tick “Apply the rule automatically” to enable auto-allocation going forward.
With both rules active, TaxTank will automatically split interest transactions between your properties every time those rule conditions are met.
