Are you allowed to claim expense deductions on a rented out property under Main Residence Exemption status ? Eg, Buy a house in January 2007. Claim FHOG, Stamp Duty concessions, etc. Move in to the house immediately. Move out of house in July 2007 (not to another PPOR). Rent it out (pay tax on rent income). Start claiming interest expenses on the mortgage, depreciation, repairs, rates and the like. Sell or revalue in July 2013 and this date will become the new CGT cost base ? In the meantime, not purchase another house as PPOR of course.