In TaxTank, you can allocate loans to properties in two ways, depending on how you want to manage your equity tracking and ensure tax accuracy.
While loan allocation affects your equity and forecast views, interest deductions are still based on how the loan was used, even if the loan is secured against a different property.
Here’s how loan allocation works, and when each method applies:
1. By Security (Property Secured Against the Loan)
Best for: Reflecting how your loans are structured with the bank.
Use this option when the loan is only used for the property it’s secured against.
Example: A loan is secured against Property A and the funds were used solely for Property A — allocate 100% of the loan to Property A.
2. By Usage (Apportioning for Tax and Equity Tracking)
Best for: When loan funds are used across multiple properties.
This method aligns with ATO guidelines for interest deductibility and gives a more accurate picture of equity and forecasting.
Example: A $600,000 loan secured against Property A is used to:
Refinance $200,000 of Property A
Purchase Property B for $400,000
In this case, allocate 33% of the loan to Property A and 67% to Property B based on actual usage.
How to allocate a Property Loan in TaxTank
Go to Bank Feeds.
Find the loan account and click the three dots on the account tile.
Select Allocate from the dropdown.
Choose the relevant property (or properties).
Enter the claim percentage for each property.
Click Save to apply the allocation.
This setup ensures your equity tracking is accurate, and your interest deductions are compliant with ATO requirements.
