Say a NSW house is owned by Mr A and it is currently the main residence of Mr A and Ms B (spouses). A and B want to move out to rent this and to buy a new main residence. But the current property loan is fully paid off and they have no money for the purchase of the new Main Residence. This will mean more tax and more non deductible interest will be payable as they will have to borrow to buy the new property. So they devise a plan for Mr A to sell to Ms B for full market value. Only trouble is full duty would be payable of the value of the property. They could save more than half the stamp duty by doing this in 2 stages. Stage 1 Mr A sells 50% of the property to Ms B so they end up as tenants in common owners 50/50. No duty would be payable in NSW if this was done while it was the main residence. Ms B borrows to acquire the 50%. Then Stage 2 Mr A sells his 50% share to Ms B. Duty would be payable on the value of the transfer = 50% of the property value. Ms B then borrows more money to acquire this share of the property. End result is property fully owned by Ms B with only half the stamp duty and a fully deductible loan (probably with 102% LVR too!!). On a $1mil property this could save them approx $22,500.1 Mr A pays cash for the new Main Residence and Ms B claims all the interest on the investment loan - which indirectly means they are claiming interest on the main residence. On a $1mil property this could mean an extra $50k pa in tax deductions for as long as they own the property.