HI Michael

Are these ANZ/NAB LOCs and offset accounts completely separate, ie different account numbers for each?

Is your wife a joint owner of the property?

Builders Of Most Expensive House On Sydney Harbour Go To War In Indonesia

http://www.andrew-drummond.com/view-story.php?sid=404

What Anthony says is true, but Tax is covered by Commonwealth Legislation such as the Income Tax Assessment Acts 1936 and 1997. This means the definition of spouse in this Act is the one to go by for tax reasons, :

http://www.austlii.edu.au/au/legis/cth/consol_act/itaa1997240/s995.1.html#spouse

"spouse" of an individual includes:

                     (a)  another individual (whether of the same sex or a different sex) with whom the individual is in a relationship that is registered under a * State law or * Territory law prescribed for the purposes of section 22B of the Acts Interpretation Act 1901 as a kind of relationship prescribed for the purposes of that section; and

                     (b)  another individual who, although not legally married to the individual, lives with the individual on a genuine domestic basis in a relationship as a couple.

===

Note that "genuine domestic basis in a relationship as a couple" is not defined.

Also note that s 118.179 covers the spouse having a different main residence and there is special treatment for "a spouse living permanently separately and apart from you"
http://www.austlii.edu.au/au/legis/cth/consol_act/itaa1997240/s118.170.html

I dont' think Steve bought in a rural area. But residential areas in large regional towns.

Why pay off an investment loan ? This will mean you have a higher loan on your main residence and will pay higher interet which will not be claimable.

You would need a valuation to be done, (s118.192 ITAA 1997)

Yes, deposit = repaying the loan.
taking it out = new borrowings.

Interest on borrowings will only be deductible if  the money is used for investments.

If you reborrow the $12k you will contaminate your loan and create a mess like this guy https://www.propertyinvesting.com/forums/property-investing/help-needed/4336793?#comment-237756

Its messy and will be hard to apportion interest at tax time.

eg. You had a $100,000 loan. paid it down to $80,000 and then take $1000 out each month to live on. Only the interest on $80,000 is deductible. This would be easy to work out if it was IO, but being PI makes it much harder.

at month 1 your ratio is $80,000 borrowings for investment and $1,000 for private = about 99% claimable.
Interest is added to the loan, 99% of this may be claimable.

at month 2 your ratio is $80,000 + $2,000. 98% may be claimable. But it is even harder to work out as you have to take into account the interest. – part of the money you borrowed, the $1,000, may have been used to pay the interest, so part of the interest on the extra borrowings may be deductible etc etc.

after several months this will be a real headache. whether a ATO auditor would be this meticulous I doubt it, but it is still best to avoid if possible.

I suggest any new borrowings for investment deposit should be set up with a separate loan, ie no redraw. The main loan should be changed to IO and the new property loan be IO as well. An offset account should be set up too. And you should leave CBA.

If someone passes their main residence to a beneficiary under their will then sell it within 2 years it will generally be exempt from CGT.
s118.195
http://www.austlii.edu.au/au/legis/cth/consol_act/itaa1997240/s118.195.html

If it is not the main residence of the deceased or the beneficiary then s118.200 will apply
http://www.austlii.edu.au/au/legis/cth/consol_act/itaa1997240/s118.200.html

If a beneficiary wants to rent the house out then they are taken to have acquired the property at the date of death and to have acquired it at market value.