If you have been absent less than 6 years you could possibly claim the first house as your main residence and sell it CGT free.

But the new house will be subject to CGT.

The loan amount after redraw would not be completely deductible. The redrawn $50,000 would be treated as a separate loan. Since you have borrowed this to park into a separate account the interest would not be deductible.

This is why it is important to get the structure right. If this really did happen, ie you were $50,000 ahead in your home loan and then wanted to move out and rent it, thent he lost deduductions would be the interest on the $50k = $3,500 pa. This means every year you could have beeb claiming $3,500 more in tax deductions. Think of the compounding effect that savings could have had.

If you had a $500,000 loan and borrowed $400,000 off your friend and placed it in the offset and paid him 3% then:
$100,000 at 7%
$400,000 at 3%
= better off for you.

probably because of the recent flood of spam messages. One spammer had 246 posts up in a matter of hours os I think some of hte replies here have been deleted because they were spam.

NM,

I wouldn't like to say too much public, but you could have utilised a dsicretionary trust and possibly a post death testamentary discretionary trust depending on the circumstances.

hi Karl

A LOC is no good for a normal loan. In fact it can be very very bad if you were to use one on your home and to later rent it out.

What is ideal is this:

$100,000 home

$80,000 loan. This can be IO or PI with 100% offset account. All rents and incomes go into this account.

After your home grows in value:
$200,000 home value
original loan is $80,000
now you can set up a LOC for $80,000

You must never use this LOC unless it is for a new investment property.
 you buy a $100,000 IP
Loan is $80,000 interest only with the remaining $20,000 and stamp duty etc costs coming from the LOC.

Many tax issues with LOCs. You should avoid them for general use and only use then to access equity for further investments.

It should be just a mathemetical calculation in that case???? Which is larger 0.05% of the loan or $395?

ATO has a new online 'calculator' on GST
https://expertsystems.ato.gov.au/scripts/net/GSTProperty/Introduction/GSTPropertyIntro.aspx?Task=da80fe99-4af2-4f1c-87e8-e0c361999fb6&NavGraph=Home&View=HomeView&PID=68&ms=Tax%20Professionals

Refinancing won't help with CGT though