Status of residency for tax is different to that of immigration. So you may find that you could have been an Australian resident for tax purposes at least part of the time you were absent from Australia. There are also double tax agreements between UK and Australia. So you may be been required to declare the Australian income from here over there too. But you should be able to claim a credit for tax paid here (and vice versa) so you aren't taxed twice on the same income.

It may still be a good idea as you can be covered for things like damage to the property or loss of rent if the tenants skip out etc.

You don't pay tax on borrowed money. But what you are saying you will do is really just shifting the loan from property B to A. Tax deductibility depends on the purpose of the borrowing and what the funds are used for. You are borrowing to pay down personal debt. So the extra interest on the increase won't be deductible.

What you could do though is set up a LOC on either property and borrow to pay expenses for property B. This frees up cash to pay off property A. You can even borrow to pay interest on property B. Using this method can save you thousands in tax – but you have to set it up properly and should get a private ruling first.

Its not that simple because you will also be able to take into account the rental income from the new purchase too. WIll depend on how many kids you have, credit card limits, car leases etc. Each bank is different too.

As a rough guide you can borrow, in total, approx 5 to 6 times the annual incomes – including rents.

Since they notified you that the finance was approved it is probably a binding contract. So you can issue a notice to complete and keep the deposit if they cannot – but then you have to resell it again. Or you could give them an extension. I would suggest issuing the notice to compete to get them moving faster and then holding off at the last min – if you wish.

When you say you have mortgage insurance – this may not be correct. If you are referring to the mortgage insurance that you pay when you get the loan, then this only covers the bank if you default and there is a shortfall. You will still be liable and will be pursued by the insurance company to cough up the rest.

If you have mortgage protection insurance, then this will cover you for the repayments of the loans if you cannot due to illness etc. But these tend to be expensive and you would be better off with income protection, possibly.

Yes, probably right Richard. One way to avoid it is to use different banks. But in the end if you get a behind and the bank gets a judgment against you for a shortfall after repossession then they can come after all property you own.

Yes I think cashflow postive is the rent exceeds all costs
Postive cashflow may be negative geared, but after tax deductions it makes a cashflow profit (due to high depreciation usually)

Yes,  there are no taxes on borrowed money. Well no income taxes.

well that is probably a way to proceed. Get your dad involved. Maybe a trust will work well too. Both can guarantee the loan and both incomes taken into account together with rent.