Deductibility, the ATO purpose test, record-keeping, capital gains tax and the errors that void a deduction.
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The tax treatment is the whole point of debt recycling, and it is also where it goes wrong. Interest on money borrowed to produce income is generally deductible; interest on your home is not. This category explains how to stay on the right side of that line.
The guides here cover whether debt recycling is tax-deductible and the ATO purpose test behind it, the record-keeping and tracing that prove the deduction if you are ever asked, capital gains tax when you eventually sell, and the mistakes that void a deduction entirely. The 2026 Budget guide sits here too, because its real subject is tax policy and negative gearing rather than a moment in time.
None of this is tax advice, and none of it replaces a registered tax agent. It is the background you need so the conversation with your accountant is a short one. Deductibility is decided by how the borrowed money was used, which is why these guides point back to Loan Structure & Setup, where the use of funds is actually determined. To get the lending built so the tax position holds up, see structuring the lending correctly.
Tax & ComplianceChecklistDebt recycling rarely fails because markets fall. It fails in the plumbing: redraw contamination, funds resting in the wrong account, one school-fee payment from the wrong split. The seven structural mistakes we see most, and how to make each one impossible.
Read the guide →
Tax & CompliancePractical GuideThe documents and tracing that prove your debt recycling interest is deductible if the ATO ever asks. A practical record-keeping guide by a licensed Australian broker.
Read the guide →
Tax & ComplianceTax ExplainerWhat happens to your loan and your tax when you sell assets built through debt recycling. CGT, the 50% discount, and managing the exit
Read the guide →
Tax & ComplianceMarket UpdateFrom 1 July 2027, negative gearing is restricted for established investment property bought after the 2026 Budget.
Read the guide →Explore the Loan Structure & Setup guides →
Explore the Risks & Life Changes guides →
Interest on the investment split is generally deductible because the borrowed money was used to produce assessable income. The tax-deductibility guide covers the ATO purpose test in full.
Loan statements per split, transfer evidence, contract notes and dividend statements, so the path from the loan to the asset can be traced. The record-keeping guide sets out the full list.
It restricted negative gearing on established property, but shares, ETFs and managed funds were untouched, so share-based recycling is unaffected. The 2026 Budget guide explains the detail.
Run the free estimate, or book a no-obligation call with a specialist debt recycling broker.
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4. Communicated well throughout.
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