Breaking a lease without penalty

I am currently renting a house in Qld and hav been having a few problems recently. My neighbours constanly watch everything i do and then go and gossip about it between themselves. They have even gone as far as spekking to my partners workmate about both of us. The neighbours complain that the dog barks to much (which it doesn't), then when i put it n a runner to controll it they winge that it is wrong and they will go to the RSPCA. The dog is not being maltreated or anything. The next thing is that the owner wants to take action against me claiming that the upstairs living area smells of dog and wants the carpets replaced. While i admit that i had let the dog in the house in a downstairs area they haven't been in the upstair living area once. The other day me neighbour had a go at me claiming my dog jumped the fence and peed on his deck. I was at work at the time and i can't control the dog 24/7. I really can't take living there any more as it is causing both my partner and myself stress and our health is suffering for it. What action can i take to break my lease, and prove that there is nothing wrong with the carpet upstairs?