My situation is similar to the case discussed in the following thread on this site. http://www.invested.com.au/4/offset-account-vs-redraw-future-deductions-34444/ 2 years ago, I bought an investment property with initial loan of $445K, I have made extra repayments to offset account (commonwealth MISA) with balance of $273K. My plan before reading the thread is to withdraw 273k to buy a new house to live in (private use). Reading the thread above I understanding that the offset balance of $273K will not comply with tax act if I buy house to live in (private use) using this money. But I can use the redraw account money to generate income. Is this correct for an offset account (MISA)? I am intending to withdraw the $273K from the offset account and invest it in term deposit. I will pay tax on (my salary + term deposit $273k). Lease the property and claim negative gearing on the full original investment loan of $445k and use the refund of negative gearing to pay off the new house (private use) Doe this comply with tax act? Any comment?