Tax debt needs an individual review. A refinance may be an option in some circumstances, but identify who owes the debt, the amount required for payout and whether repayments are sustainable. Speak with your accountant about tax treatment.
Prepared for Reduce My Repayments by Monet Finance · Published 5 October 2026 · General information for Australian homeowners
Separate the taxpayer from the homeowner
Write down whether the debt belongs to you personally, a sole-trader business, a company or another entity. Bring the relevant ATO statements and any payment-plan correspondence. Do not assume that a company obligation can simply be moved onto an individual mortgage without considering the structure and consequences.
Keep engaging with the ATO
Do not wait for a loan decision before responding to ATO correspondence. Ask about the available payment arrangements and keep lodgements up to date. If a payment plan exists, record the dates, amounts and whether it is current. Give your broker the complete position rather than only the original tax bill.
Ask your accountant to review the purpose
Borrowing to pay a tax debt and claiming interest on that borrowing are separate questions. The answer can depend on the taxpayer, the use of funds and the loan structure. Ask for advice specific to your case before assuming a deduction. Keep the loan purpose and fund movements documented.
Address the next tax bill too
A one-off payout will not solve recurring under-provision for tax. Build future tax commitments into the cash-flow discussion. Ask your accountant what provision needs to be made from future income, then test whether that amount fits alongside the proposed mortgage repayments.
What to prepare
- ATO account statements and entity details.
- Payment plan and collection correspondence.
- Current income and business financial information.
- An accountant’s view on ongoing tax provision and loan purpose.
Your questions answered
Will refinancing automatically make interest tax deductible?
No. Obtain tax advice for the particular borrower, debt and use of funds.
Should I stop my ATO payment plan while applying?
Do not assume it can stop. Keep engaging with the ATO and follow the agreed arrangements unless they are changed.
Is approval guaranteed if I have equity?
No. The debt type, income, property, costs and lender requirements all need review.