I can't get my head around this. I own a 3 bedroom freestanding house in NSW. I am planning to put a GF on the back, and me as the sole owner, move into the small GF and rent the main house out. I will ideally rent it out room by room, as then I can do it directly without agent, without splitting the power and utilities. If this is not good for tax treatment, I can find someone to act as a "head tenant" where they are my point of contact and maybe I give them a lower rent and they manage renting the other two rooms out or something. I can either keep access to the main property (e.g. to use the laundry) or keep well away from it (depending which way makes the tax laws work better). What tax do I need to be aware of? 1. Income tax (I can use negative gearing calculator to see the impact) 2. CGT tax (main house is 70% of the block, GF is 30%, I assume some calculation will apply on sale) 3. Land tax Amy I missing anything? I am hoping land tax main residence exemption still applies? NSW legislation Schedule 1A Land Tax Management Act 1956, does my situation fall under any of these definitions? 2 rooms? A flat? even though it's a house, is it a "flat" according to this definition? If I rent it out to multiple people separately? Or even all together? "flat" means a room or a suite of rooms (whether or not forming part of a building or a detached building)a) used or occupied as a separate dwelling, or(b) so constructed, designed or adapted as to be capable of being used or occupied as a separate dwelling. If it is land tax exempt, I'll save $5k a year. May be wishful thinking....anything else to be aware of? When I first bought, this house was an IP, I now live in the house, when the GF is built, I will move out of the main house and into the smaller GF. I plan on fencing separate yards etc, but am flexible on everything to make it more financially appealing. Thanks!