Rental property remortgage

Rental property remortgage

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Am I correct in thinking that a rental property can be remortgaged, and the money used for personal use, but still the interest on the entire mortgage is tax deductable as long as the total of the loan does not exceed the original purchase price of the property.

EG. Property bought for £100,000, using a £75,000 mortgage. A few years later, it is remortgaged to release equity of £25,00 (which is spent on things completely unrelated to rental house). New mortgage of £100,00 – can all interest be relieved against rental income ?

Thank you.

John

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By skylarking
15th Nov 2007 16:26

Yes, and just to add a little bit. . .
It may usually be purchase price that indicates the ceiling, but not always. It is my understanding it is strictly the value of the property at the time that it is first available for letting.

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