Why not live in it from day 1 – this will establish it as your main residence. Once it is your main residence you can then move out and negatively gear and be exempt for CGT for up to 6 years while not living in it. s 118-145 of the ITAA 1997.

If you do what you say, then you will be liable for CGT for any growth during the first 11 months (which may not be much), but you will also be able to negatively gear, or claim all expenses associated with it during this period it is rented.

It doesn't really matter when you buy the stuff to renovate as if you are living in it you will no longer be able to claim things. If you do renovate early on, you may be able to claim depreciation for a short period. If you are repairing things to the state they were when you purchased it you may be able to claim in full – for certain items. If the work is classed as capital repairs then you can generally only claim a small portion each year.

One implication is you will be positive geared and paying tax while you are paying large amounts of non-deductible interest on the new one. Some people sell to enable them to move the proceeds to the new home, and then buy again borrowing to buy another investment property. Implications are: Agents fees, Stamp duty on the new IP purchase, loan fees, govt charges etc.

If your current property is a good one and you wish to keep it, you could consider selling to your spouse or even to your own trust. This may enable you shift deductibility and you get the keep the property – and avoid the agents fees.

Please note you could still claim the old house as your main residence for up to 6 years while you are not living in it. You can only claim one residence as the main residence, but you would have a choice of the old or the new and this choice would only need to be made during the year you lodge the tax return of the sale. An example of why you may elect to keep the old on as the main residence is this may have been growing much fast than the new old = more of a capital gain.

Interesting question. I don't think you can claim GST back on residential property expenses at all – but maybe wrong. I have never claimed any myself., but I may be wrong. It is just too complicated to understand.

Thanks guys. And there is Jon Salvador who lives up on the Northern Beaches (in Sydney). Jonchu is his stage name I think.

Probably it would be best to approach a few agents and hear what they have to say.

If you decide to do it all yourself it would be a bit complicated. I guess you would need to combine all the blocks into one title and then strata or re-subdivide into the new sizes.

In terms of stamp duty, you may get around it by having the final product owned in exact same portions as the current situation – eg 25% each. But there will be heft legal fees to prepare all this. A deed of partition may be needed.

I generally would never buy a unit. You can have problems with strata issues and you lose control.

Also buildings depreciate while land appreciates. With a unit you don't have much land content, so a house should be better in the long run.

Another point – it is difficult to add value to a unit – such as extensions etc!

And you can generally only class a property as your main residence once you have lived in it.

What about buying a PPOR now, getting the FHOG and Stamp duty concessions while they are still there, and live in it for 6 months. Then move out and rent it while renting yourself. Under s118-145 of the Income Tax Assessments Act you can still class this property as your main residence for up to 6 years while it is being rented out. And you can claim all costs associated with it as per normal investment property (rates, interest etc). Then if you sell this within 6 years, provided you have no other main residence, it can be CGT free.

After renting it out for a while the value will hopefully increase and then you can use the equity build up to leverage into the next ones.

I agree with Richard that is it better to keep them all separate.

The lenders will release funds to the builder in about 3 or 4 stages as building progresses (eg slab down, lock up stage etc). They will need to send a valuer out to check the work has been completed etc. So there is usually another few hundred dollars in fees associated with construction loans.

To approve the construction loan they will generally need a fixed price building contract with a registered builder. There are a few lenders that will lend to owner builders and they require detaile cotsings of materials used etc. (I can send you a spreadsheet from one of the lenders if you like). They give this to their valuer who assesses the value and estimates the value on completion.

The lender doesn't really need a accurate timetable of construction. You just ring or fax them when the relevant stage has been reached and they order the valuer. The inspection is done and money released a few days later.