The sale of the property for $400K was just to make the point, sale price is not important. If he pays $400K, he will give us more in reality on the side. I am just looking for the best way to minimise my tax bill over the next 3.5 years. Any deduction on interest paid on loan would be much appreciated. Which brings me to my next question.

My home loan has a redraw facility. We currently have surplus cash sitting on the homeloan. If i redraw said cash to invest in shares, would my interest repayments on this money be tax deductible.

Eg. redraw $100,000 from home loan (current rate 8% or so) to invest in shares. Does interest debt on $100,000 ($8000) become tax deductible?