Thank you Duckster for your comments. I sincerely appreciate your time. I am very new to this would you recommend me getting an advise from a tax consultant or financial planner?

Also would like to add to my scenario that I did not get FHOG as I had a 2 bedroom unit which I bought last year and currently reside in. When I was buying the new place  the FB told me to make my unit as investment property  and the house as Owner occupied .

Which I duly did but didn't realise that the house had a lease agreement  till September 09 and the people who are living in there are quite nice and desperate to stay there till there divorce sought out etc etc.

So am I still eligible to claim the interest paid on the mortgage less the rental income on this owner occupied till September 09?

Regards
sam