Q.

My husband and I are looking at buying a new house. We owe $50,000 on our current home. The new house will be bought for around $400,000. We would like to keep our current house as a rental, but because we owe so little on it and will owe a lot more on our new house, will it be tax effective to hang on to our current house as a rental? Or should we sell the current one and buy an investment property later on when we've paid a fair chunk off the new house?

Your best strategy depends on the future capital gain of the property but on the facts supplied it would appear you are better off to sell it now, take the tax free capital gain and minimise the borrowings on the new house in which you are going to live. You could always borrow back for investment at some stage in the future and the interest on the new loan would be tax deductible.