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Investment property that has been also used as a home

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Lorraine | 17 Jan 2013, 12:36 PM Agree 0
Hi all

My late husband and I bought a house in 1997 as an investment property. After my husband had a liver transplant we were forced to move from Sydney to Brisbane and moved into the house. We were living on his salary continuance insurance at the time and, as was a sign of the times, the banks still were happy to lend us money so we started buying other properties, moving into them and renovating them, keeping the last house as an investment property again. Over the years we renegotiated the loan for the investment property several times as we used the ever increasing capital to fund the other houses. Unfortunately our luck didn't last and long story short, the bottom fell out of the property market and my husband was diagnosed with cancer. We sold the other houses and moved back into the original house once again. After my husband passed away in 2007 I renegotiated the loan in my own name and increased it a little a few years ago to carry out some renos. Now my new partner and I have decided to get back into the property market and we will be renting this house out once again. So, pardon the long explanation but my question is this. How does this affect the property and what I can claim when I'm renting it out. Can I claim all the interest I pay on this property now? Or is there some complicated formula that my accountant will have to use to calculate it? Thanks for your help. Lorraine
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