If I rent out my home, will the interest I am paying on my mortgage become a tax deduction against the rent income?

Q.

I am considering renting out my home and wish to know if the interest I am paying on my mortgage will become a tax deduction against the rent income. My mortgage currently stands at $84,000 and the house value is $205,000. I would expect around $220 week rent. I have an owner occupier loan and have been told this type of loan cannot be claimed as a tax deduction. I am looking at moving back into this home in two to three years so I will have no capital gains tax issues.

You can claim outgoings such as rates and interest as soon as your property is available for rent and you can be absent from your home for up to six years without losing your capital gains tax exemption provided you don't claim any other property as your residence in that time. Make sure you obtain a depreciation report from a quantity surveyor - there will be a once only cost of around $600 tax deductible and it should pay for itself in the first year.