Skyeboy,

There are a number of stratergies you could use to tur your property into a =ve geared property using your equity. How ever this will depend on the proerty the value and the properties attributes. Here is two suggestions.
1. Do an option contract on the property selling for 20% per than its current market value and then prividing vendor finance to the purchaser in the form of a rentl agreement.
2. Use a small amount of your equity ie $5K to furnish the property and rent it out furnished.
At the end of the day you need to work out creatively how and or what you can do to increase your rental return.
regards
John

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Can you just borrow or redraw the money at bank rates to live on and then sell your property to repay the loan and becuase ur on zero income, your capital gain tax would be at the lowest rate ? Is that how it works?

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Yes you can borrow or redraw to live on provided your servicability allows, or you have at the time of establishment of the loan set up this type of loan structure which allows this. If you have zero income then your serviceability wont allow you to restructure your loan to do this.

Yes you can then sell the property to repay the debt

In relation to the capital gain, 50% of it gets added to your taxable income for the year and you will pay tax on that accordingly. 50% is tax free, how ever you should confirm this with your accountant.

regards
John