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11. Mortgage with redraw facility.
If the mortgage to purchase the property has a redraw facility, think carefully before re-drawing to fund something private such as buying a car or a holiday. The interest expense must be apportioned between the "deductible" and the "private" portion of the total borrowings, and the calculations can be complicated.

12. Selling the property.
Make sure you declare in your tax return any capital gain when you sell the property. If


you owned it for more than 12 months (and it wasn't a "profit making scheme" as mentioned above), you are only taxed on 50% of the capital gain (after first offsetting it against any capital losses). If you lived in the property at some stage as your main residence, speak to a Chartered Accountant about whether you qualify for the main residence CGT exemption (the rules can be complex).


Disclaimer: This document is produced by the Institute of Chartered Accountants in Australia. It provides general information current at the time of writing. It is not intended that the information provide advice and should not be relied on as such. Professional advice should be sought prior to actions on any of the information contained herein.

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