National Australia Bank Ltd. has tightened its home lending rules after the Australian government removed a perk that allowed property investors to claim mortgage interest payments as a tax deduction.
The bank will not include the effects of the tax break for properties sold after May 12, a move that could reduce how much buyers are able to borrow, according to a memo seen by Bloomberg and confirmed by a spokesperson. For sales before this date, the bank will still push through loans that were calculated using the tax concession, known as negative gearing, the memo states.