What about finance?

CGs are just added to your annual income and you pay tax on this – so the rate will vary according to your income. If you hold the asset more than 12months, then you should be able to get the 50% reduction in CG too.

have you considered getting both PPOR and rental?

You could purchase a property, move into initially and then out again. Rent it for up to 6 years claim all deductions and still not have to pay CGT if you do it properly.

It just comes down to minimising the expenses and increasing the rents as much as possible – and taking advantage of tax deductions.

Good points Linar. And you could still have a main residence rented out elsewhere, CGT free.

Negaitve gearing is when you borrow to invest and the expenses are greater than the income received. Usually this is only done if you think there will be a capital gain.

Generally you can only have one main residence at any one time, so if you claim the main residence CGT exemption on the one you are selling you cannot claim the new property as your main residence at the same time.

But if you limit the cross over to 6 months, you may get the CGT exemption on both properties under s118-140 of the ITAA 1996, http://www.austlii.edu.au/au/legis/cth/consol_act/itaa1997240/s118.140.html

Yes, but you would lose the CGT free status of your house, have to pay stamp duty on the transfer and land tax each year (possibly). The house may be negative geared initially, but this will change as rents increase so you will be paying extra tax that you would otherwise not have had to pay

Most people probably do this for other than financial reasons – location closer to work etc.

But there may also be good financial reasons such as claiming negative gearing benefits on  your home while paying cheaper rent. ie you may save a heap of tax for a few years and then be able to move back into your house and avoid CGT completely.

Interest in advance is when you pay the interest upfront. It is usually done in June with 1 year's interest being paid upfront. This helps you claim a larger tax deduction this fin year – but means less of a deduction the next year so be careful.