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Dez1234(Newbie)Newbie
8 Apr 2026

Hi, I used equity from my O/O to purchase IP. So interest on equity loan 200k and new investment loan 760k is all tax deductible if I rent it out. its also brand new so i get full depreciation (capital works 8k per yr and plant and equipment 6k first year tapering down to 3k after 5 years).


But now im considering to move into it immediately and make it my PPOR so can get the full CGT exemption (house prices keep rocketing up and i may sell it within 6yrs)


So questions are :


MAIN QUESTION - I know the total loans (960k) are not tax deductible during brief period i live there. But what about after I move out and rent it? Can I claim tax deductibility then or do i lose ability to claim any tax deductions forever because i moved in initally?


OTHER QUESTIONS - How long do I need to live there to establish it as only PPOR? (It only takes a very short time to adjust addresses on bills, drivers licence from old PPOR to new one)


Im pretty much hedging my bets on property going up a lot and getting full CGT exemption, but if lose full tax deductibility forever because the purpose of the funds changed from investment to moving in to O/O briefly then cant see thr point.


Thanks in advance for your feedback.





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TaxTalk1234(Dynamo)Dynamo
8 Apr 2026

I suspect you might be missing a fundamental feature of the 6 year absences provision - you cannot treat two properties as your main residence at the same time (apart from a specific 6 month period in some circumstances when buying and selling). So if you move into the new property, then your old property can no longer be treated as your main residence for the period you are treating your new property as your main residence and therefore becomes subject to CGT in part.


But if you know that and have modelled that you want to treat the new property as your main residence INSTEAD of the current O/O, then the answers to your questions are:

  • no, you don't lose interest deductibility long term, just for the period you are living in it
  • There is no set time you need to live there but the whole point is that you genuinely need to establish it as your main residence and a brief time smells bad to the ATO in the event of an audit. You would have to really move there, really spend time there and have a good explanation as to why you moved out again to stop it looking like a sham arrangement

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Dez1234(Newbie)Newbie
8 Apr 2026

Hi thanks for advice. If I move in i would be eating into savings as loan repayments would eat up salary. But it might be worth it if I can claim the CGT exemption if sell within 6 years. (I will be switching PPOR from current to new)


If I move into in later I just pay CGT on value from date of purchae until value day i move in?



TaxTalk1234(Dynamo)Dynamo
9 Apr 2026

It's not just based on the market value movements between two points in time as such.


If you move in as soon as you own it, then you will need to get a market valuation done when you move out and first start renting it out (the same will be needed for your current O/O if you have always lived in it and now move out of it and start renting it out). Then the cost base of the property is reset to that market value, with a deemed acquisition date of that time and any ultimate capital gain is calculated based on apportioning the gain from that point in time between the days it was your main residence for tax purposes and the days it was not.


However the reverse is not true - if a property is your investment property first, the original purchase price and associated costs remain the first element of your cost base and any ultimate gain is apportioned over the whole period of ownership between days it was your main residence and days it was not.

KaraATO(Community Support)Community Support
9 Apr 2026

Hi @Dez1234,


Interest deductibility and CGT are worked out separately.


Interest can be deductible when the borrowed funds are used to buy a property that is rented or genuinely available for rent. If the property is used as your main residence, interest isn’t deductible for that period. When the property later becomes a rental again, interest may become deductible again from that point.


If you rent the property first and only move in later, you generally can’t treat it as your main residence for CGT purposes until you actually move in. The 6‑year rule only applies after the property has first been established as your main residence.


In that situation, when you eventually sell:

  • you generally pay CGT on the period from purchase until the date you moved in, and
  • the main residence exemption can apply from the time you move in (provided it’s genuinely your home from that point).

So yes - where a property is rented first and later becomes your main residence, the capital gain is usually apportioned based on:

  • the period it was income‑producing, and
  • the period it was your main residence.

You also generally can’t treat two properties as your main residence at the same time, except under limited overlap rules.


Because switching main residences and applying the six‑year absence rule can significantly affect the CGT outcome, it’s best to speak with a registered tax agent who can look at your scenario in detail.

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