Renting out a portion of PPOR

Thinking of buying a new (old) house in Sydney which is currently split into 4 1BR flats. We are selling our current house and will move into the two flats which will be vacant at the time of sale. Can we please have some advice on the following: (I know I will need to get some professional paid advice on this but I wanted to get an idea so I know roughly what we are looking at. Thanks in advance.

·      Rental income

o   Which tax return does this income get assigned to? (can we assign it to the lowest earner? Split it etc…)

·      Expenses for rental portion of house

o  Are renovation costs associated with the rental portion of the house a tax deduction?

o  Are maintenance cost associated with the rental portion of the house a tax deduction?

o  Are rates, insurance, power, Real Estate fees, stamp duty, water etc associated with the rental portion of the house a tax deduction?

o  Can you claim a portion of the mortgage interest costs as an expense?

·      Any benefits for home office/business (my wife is a Graphic Designer)

o  Can a portion of the house be rented to the business?

o  Can this rent then be claimed as an expense by the business and then used as a deduction?

o  What are the CGT implications of this?

·      How would CGT be worked out?

o   If we moved into half the house a few weeks after settlement.

o   Rented out half/quarter for several years (6 year rule apply if under 6 years?)

At purchase we will own about 65% and have loan for the remainder.

Thanks