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AmandaBS
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@amandabs
Join Date: 2005
Post Count: 549
June 24, 2007 - 4:18 am
If you're in Qld I can help just drop me a line.
AmandaBS
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@amandabs
Join Date: 2005
Post Count: 549
June 24, 2007 - 4:17 am
I agree with Millions that any of those wedge shape blocks at the end of the culdesac look best. They also look elevated? Hey Jaffasoft maybe I'm getting old but the numbers are very small so I'm buggered if I can see Lot 20. By the way it looks too green for Toowoomba. Care to share where the location is?
AmandaBS
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@amandabs
Join Date: 2005
Post Count: 549
June 24, 2007 - 4:09 am
The obvious answer is you need to subscribe to Property Divas of course!!
Otherwise there's a new magazine out called "Your Investment Property" well worth a look, plus Michael Yardneys free newsletter at Property Update or Kirsty Dunphey produces an inspirational weekly email.
AmandaBS
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@amandabs
Join Date: 2005
Post Count: 549
June 21, 2007 - 1:20 am
Hey a very old post but still as funny today.
My favourite was No. 14.
AmandaBS
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@amandabs
Join Date: 2005
Post Count: 549
June 21, 2007 - 1:15 am
Hi Jason,
All profits from a Discretionary Trust must be allocated each financial year against the trust beneficiaries, at the discretion of the Trustee, which in your case is the company. However this can be done via a journal entry by your Accountant and doesn't actually need to be paid directly to each person in cash. Any un-drawn trust distributions are held by the trust on your behalf. This is quite common for trust distributions made to minors and they just accumulate over the years, and most grandparents pay the lump sum out on their 18th birthday.
AmandaBS
Participant
@amandabs
Join Date: 2005
Post Count: 549
June 21, 2007 - 1:01 am
Yes I tend to agree with Marc that most people adjust their lifestyle to suit their income. Attached is a link to our Family Budget Planner Excel spreadsheet which may be of help for them.
http://www.propertydivas.com.au/Downloads/famiy_budget_planner.xls
AmandaBS
Participant
@amandabs
Join Date: 2005
Post Count: 549
June 21, 2007 - 12:56 am
Try giving Matthew Quinn a call from Catalyst. They are based in Adelaide but have branches Australia wide.
Here's the link: http://www.propertydivas.com.au/7ProfServ/Professionals.aspx?cmaid=9698e357-b6ce-4e7c-8f1c-d813757e1b53&cmstat=Profall
AmandaBS
Participant
@amandabs
Join Date: 2005
Post Count: 549
June 8, 2007 - 1:22 am
Hi Troy,
The following is an extract of a document off our website that should clear things up for you:
BORROWING COSTS
Under Section 25-25 of the Income Tax Assessment Act you can deduct expenditure incurred for borrowing money, to the extent that the borrowed money is used for the purpose of producing assessable income.

What is classed as a Borrowing Cost?
- Loan establishment fee
- Mortgage registration fees
- Title search fees
- Mortgage brokers fee/commission
- Stamp duty on the mortgage
- Valuation fee charged by the lender
- Lenders Mortgage Insurance (LMI)
- Legal costs in relation to the mortgage
- Underwriter’s fees
 How do I claim Borrowing costs in my Income Tax Return?
Your Accountant will calculate this for you.
In most circumstances the total sum of all borrowing costs is spread over the period of the loan or 5 years, whichever is the shortest. So if you repay/refinance the loan within 5 years, then the remaining balance of the borrowing costs are claimed in that year. Borrowing costs not exceeding $100 are fully tax deductible in the year in which they are paid.

Example
Jan and Bob borrowed $140000 to purchase an investment property on 15/09/2004 and incurred the following Borrowing Costs;

Mortgage registration fee 106
Stamp duty on mortgage 602
Title search fee 20
Establishment fee 785

Total Borrowing Costs $1513

Claim as follows;
1. 2004 $1513 x 288 = $238
 5 365

2. 2005 $1513 x 365 = $303
 5 365

3. 2006 $1513 x 365 = $303
 5 365

4.. 2007 $1513 x 365 = $303
 5 365
5. 2008 $1513 x 366 = $303
 5 366


6. 2009 $1513 x 77 = $ 63
 5 365
TOTAL BORROWING COSTS = $1513

Q. What is LMI?
A. Lenders mortgage insurance (LMI) is a one off payment charged by some financiers as a condition of loan approval. It protects the lender from loss in the event that the borrower defaults on the loan. LMI is therefore a borrowing cost and is not able to be claimed outright as a tax deduction under Sec 8-1 of the ITAA.

Q. Can I write-off the stamp duty on transferring the title on purchasing a rental property as borrowing costs?
A. NO! The costs associated with the transfer of title are “acquisition” costs that are payable regardless of whether or not money was borrowed to fund the purchase. Stamp duty on title transfer forms part of the cost base for Capital Gains Tax purposes.
AmandaBS
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@amandabs
Join Date: 2005
Post Count: 549
June 8, 2007 - 1:16 am
Very modern, I like it!
AmandaBS
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@amandabs
Join Date: 2005
Post Count: 549
June 8, 2007 - 1:09 am
Subdividing What is SubdividingSubdividing is when a piece of land is split into two or more pieces (ie separate lots). The process is controlled by the local Council. Planning codes and procedures vary significantly between Councils and also between States and Territories, as do the relevant fees and charges.Factors to examine when considering a Subdivision· Local town planning regulations· Land zoning restrictions· Minimum size of lots· Access to water and sewerage services· Setback requirements · Minimum building envelopes· Parks and open space· Easements· Vehicle access including Council refuse collection· Storm water management· Increased noise from new development· Environmental and heritage issues Hidden Costs A subdivision can take several months (and sometimes even years) to complete so you must factor in your holding costs such as:
· Interest
· Rates
· Land maintenance – eg slashing and weed control
 Many astute Developers make the purchase contract for the land subject to the acceptance of a Development application approval with Council. This is usually done with an option agreement (see your Solicitor for more information) Dividing the land
Before you rush out and build a new dividing fence in your backyard, you should first consult your local Council for specific guidelines and castings, as it is imperative that the property is divided correctly. Any errors at this stage will cause major problems further down the track. The Process
Most Councils require a Development/Planning Application to be lodged, together with details and drawings of your proposal. A Town Planner or Surveyor can assist you with this process, and they may also be able to give advice regarding conditions that the Council is likely to require. 
 Before lodgement of the Application, you can ask the Council for a “Pre lodgement” meeting to discuss your subdivision and determine what issues will need to be addressed in the Application.
 When the Council receives your application, they may require you to erect a notice board for public viewing. The purpose of the board is to alert the public of the proposal by providing details of the subdivision. The Council may also write to the owners of the residents of the neighbouring properties advising of your intentions. We suggest that you contact the Council to find out what procedures your local Council uses. Additional information the Council may requireWater and sewerage: · Are existing services available?· Can the existing infrastructure cope with increased use or need upgrading?· Is permission required from neighbours to access property?Storm Water· How will storm water run off be managed?· Is a drainage pit required?· Are tanks required to regulate the flow of storm water?Noise· Will existing main road traffic noise affect the subdivision?· If so, how will this be reduced? (Fences and/or earthworks)Soil Conditions· Do the soil conditions (eg.sand, clay) impact on road and footpath design?Other issues· Footpath· Lighting· Signage Issues for the Developer to consider For the Developer there are also other issues to consider such as:
· “Wasted” land due to unusual configurations
· Steep slopes
· Flood-prone land
· Other planning overlays (ie restrictions)
· Other factors that may reduce the number of lots and so profitability.
   Approval of the Development Application
The approval process for your Application may take several months depending on the complexity and size of the subdivision. 
 You will then be issued with a conditional approval covering topics such as:· Developer to supply a plan of survey and mark land with survey pegs· Road reserve· Easements over stormwater, water and sewage mains· Requirement that storm water pipes be designed to cope with a “1 in 100 year” event.· Dust control· Hours of permitted work (usually Mon – Sat 6:30am to 6:30pm)· Headwork contributions to be paid by Developer- Open space (parks) - Social infrastructure- Road infrastructure- Water infrastructure- Sewerage infrastructure- Street scape contribution· Disposal of cleared vegetation· Entry walls or features· Connection fees to live sewer mains· Road (width, pavement depth, footpaths, kerb & channel, ramp profiles)· Street lighting· Fire Extinguisher (Battle axe blocks)· Underground electricity and phone· Erosion and silt management· Maintenance period of roads· Retaining walls· Fire ant inspections· Portable long service leave for Building & Construction IndustryIf you are not satisfied with the Council’s decision, you may apply for a review. Operational Works
Before work can begin, you will need to engage the services of a Civil Engineer to design and draw the sewer, water, road, footpaths and any other Council requirements. 
 This is a separate application usually referred to as “Operational Works” and attracts additional fees and charges.  Final StageAll civil work will require Council and Engineering certification. When the subdivision has been completed to the satisfaction of the Council, you can then apply to register each separate title deed. ConclusionLand subdivision is a $mart way to fast track profits into your investment portfolio. However, as with all investment decisions, thorough research is necessary in order to balance the level of risk associated and ensure that the process runs as smoothly and quickly as possible, and that the best, most profitable outcome is achieved.The above is an extract of a document off our website. From my experience triple the estimated time and double the costs!! 
AmandaBS
Participant
@amandabs
Join Date: 2005
Post Count: 549
May 29, 2007 - 10:04 am
The ATO is taking applications now for 2008 so I assume this is the application you have just signed. Best to give your Accountant a call as any tax bill owing at the end over $400 will attract a penalty.
AmandaBS
Participant
@amandabs
Join Date: 2005
Post Count: 549
May 29, 2007 - 10:01 am
We have some fantastic stories from property investors on our website that you may be interested in.
AmandaBS
Participant
@amandabs
Join Date: 2005
Post Count: 549
May 23, 2007 - 8:04 am
Its a bit hard to explain but I'll do my best. Depreciation means the property is reducing in value so if you sell it for more then you must add back all the depreciation you've claimed as the property has increased in value not decreased.
When you sell a property if the contract does not specify how much each asset that you've depreciated is sold for then you'll need to add back the depreciation you've previously claimed as a tax deduction.
To make it easy lets assume Mr X buys a house in 2003 for $300000 + $8000 in stamp duty/legals. He gets in a QS who calculates he can claim $100000 as Capital works (2.5%) and another $20000 contents@ 10%. Prime cost.
2003 $2500 + $2000 = $4500 tax claim
2004 $2500 + $2000 = $4500 tax claim
2005 $2500 + $2000 = $4500 tax claim
2006 $2500 + $2000 = $4500 tax claim
So after holding the property for 4 years he's claimed $18000 as a tax deduction in his tax return.
You decide to sell the property in 2007 for $750000 less selling costs of $20000 = $730000 & do not specify the value of assets.
To work out the CGT
Cost base = $308000,
Sold for $730000 – $18000 = $712000
Net Capital gain = $404000
Less: 50% discount
Total Taxable CGT = $202000 (shared depending on ownership)
The $18000 would not receive the 50% discount and would be taxed at your marginal tax rate, so adding on the $202000 thats a total of $220000 to be included in Mr X tax return.
Lets assume Mr X instead contacted his Accountant and included a depreciation schedule with the contract showing the written down value of assets of $120000 – $18000 = $102000. How much would the CGT be:
$730000 – $102000 = $628000
$308000 – $102000 = $206000
Therefore Net CGT is $422000
Less 50% discount
Total taxable CGT = $211000
So by including the depreciation schedule in the contract he's saved $9000 from being taxed at his marginal rate which would be 48.5% = $4365. So who's going to phone their Accountant next time BEFORE they sign a contract of sale?
AmandaBS
Participant
@amandabs
Join Date: 2005
Post Count: 549
May 23, 2007 - 7:21 am
I know it takes a huge amount of effort and time to develop a website so well done for taking the plunge but I think ours is better!!
AmandaBS
Participant
@amandabs
Join Date: 2005
Post Count: 549
May 19, 2007 - 3:47 am
A joint venture is a legal agreement between two or more parties that come together to generate profit. Generally, each party contributes something of value – perhaps assets, cash or knowledge – in return for a share of the net profit. A joint venture is not a partnership, but a separate legal arrangement. Each joint venture is very unique and so the agreement must be sufficiently detailed and issues it should cover include:
Purpose of the joint venture
Each party’s role and responsibilities
Initial and ongoing contributions that each party makes
Share of ownership and profit/income
Appointment of Manager, detailing duties and obligations
Duration, ie a set project or ongoing.
Dispute resolution
Sale of Interest.
Probably best to draft one up yourself covering these issues and then take it along to a Solictor to review and make any necessary changes.
AmandaBS
Participant
@amandabs
Join Date: 2005
Post Count: 549
May 16, 2007 - 11:17 am
We have an example calculation on our website at http://www.propertydivas.com.au/3TaxMang/CapitalGains.aspx
AmandaBS
Participant
@amandabs
Join Date: 2005
Post Count: 549
May 16, 2007 - 11:14 am
Have a look in "Data & Research Reports" on our useful links page. You can also get a free postcode report on Property Value.
http://www.propertydivas.com.au/5Tools/DivaLinks.aspx
AmandaBS
Participant
@amandabs
Join Date: 2005
Post Count: 549
May 15, 2007 - 10:40 am
Sorry Guys the newsletter is a bit late this month which announced the results! Should be out in the next 24 hours.
Brenda's story "The Creating of a Property Investor" won first prize which is sure to bring a tear to your eyes!
Lin won the book prize for her amazing first reno story.
Congratulations to you both, and a big thank you to Steve for his generous support.
AmandaBS
Participant
@amandabs
Join Date: 2005
Post Count: 549
May 15, 2007 - 10:29 am
You can't just make such a decision based on costs alone, as you really do need to consider what will suit the location of the block and the area. Personally I'll take a "Queenslander" on stumps any day over a cheap "box" thats slab on ground. Just my opinion! Anyway here's an extract of a document off our website about Removal Houses:
INITIAL STEPS
· Visit your local Council
We suggest that you make your first step a visit to your local Council to find out about local requirements and restrictions. Each Council around Australia has different procedures and varying fees, so it is imperative that you have the right information from Day 1. For example, it is vital that you know whether you are required to supply a “bond” to the Council, and if so, how much – it can be a substantial amount which you will need to add into your budget. Later, when you have found your removal house, you will need to check with the Council that your proposals fit in with the overall town planning scheme. (See also Town Planners).
· Find your house and contractor
Next, you will need to find your removal house and a suitable block of land. Removal houses can be found in your local paper, the “Trading Post”, “Yellow Pages” as well as online. Prices vary widely so consider your budget before you embark on your search. Some vendors are businesses that also provide the removal service, whereas others will be private individuals who will require you to arrange for a removal contractor to take the house away and so you will also need to find someone qualified to do this. Removal contractors will ask you to sign a contract. This should set out the terms and responsibilities of the removalist and state all inclusions, such as bonds, fees, delivery details and services provided. For example, some firms will deliver the house on blocks, whereas others will carry out stumping and some even renovate the house for you. We ALWAYS recommend that you seek legal advice in relation to any legal contract – especially as there is no “standard” contract for the industry – Buyer Beware!!
· Choose your land
You’ll also need a sufficiently sized block of vacant land for your house, with no easements or covenants that restrict a removal house from being placed on the block
. · Get your finance in place
Talk with your financier, as many lenders will not take security over a removal house until it is in position and has been stumped.
THE PROCESS IN DETAIL
Inspections and plans
When the Council considers your application for a removal house they will visit both the site and the proposed house to ascertain if it will suit the situation. Consideration will be given to existing neighbouring homes and to the style, materials used, roof pitch and height of your proposed house. Neighbours may be granted permission to view your proposal and lodge objections if they wish, so this is why it is imperative that you research your area first. As with all building works you’ll need to obtain a soil test so that an Architect/Engineer can consider structural details and design plans for submission to the Council. The plans will contain details including:· Existing floor plan and details of any alterations· Sub floor, beams, bracing and tie down details· Architectural elevations, location and orientation· Any other relevant information Lodgement of preliminary plans with the Council will attract fees that vary between States. An Officer from the Council will then prepare a report of recommendations of building work required, such as:· Level of renovation work required – usually no “patching” is permitted and rotten materials must be replaced· Maximum building height· If roof replacement is necessary, including insulation· Generally rewiring all electrical work· Replace/upgrading of plumbing· Installation of smoke alarms· Tie down, bracing and depth of footings· Determine the bond (Amount held by Council until all works are complete) You may lodge a Building Application simultaneously with the Preliminary Application and again, fees vary depending on the size of the dwelling and number of plumbing fittings.
Payment of Council Bond and other fees
Most Councils charge a bond. This is a sum of cash to be held by the Council until all works are completed to its satisfaction – usually within 12 months. The bond provides the Council with a “safety net” in the event that it needs to step in and take over an abandoned or unfinished job, or one which is not completed to its satisfaction. The bond is often a significant amount and this can put a huge drain on your cash flow. However, it is usually possible to ask for a partial refund as work progresses. Before the house can be moved, all bonds and fees must have been paid to Council and the appropriate authorities notified. The contractor will need to provide the Council with proof of current insurance and a building services insurance policy may also be required. Bonds also apply for escort fees and security bonds for roads.
Once the house is in place
Make sure your contract specifies who will be responsible in the event that damage occurs when the house is moved. After the house is moved, as with all renovations, you’ll need to have a team of tradespeople ready to start work. The sooner the house is finished, the sooner you can receive your bond back.
A final word…
A removal house requires lots of careful research and planning, but the rewards are enormous. The satisfaction that you will gain from turning a dump into a shining diamond will give you immense pride, and co-ordinated correctly, a very healthy profit too.
 SUMMARY OF THE PROCESS1. Visit council or town planner
2. Purchase vacant land
3. Find suitable house for removal
4. Engineer report and architect plans
5. Lodge Preliminary plans with council
6. Council assessor visits house and site
7. Pay bonds and fees to move house
8. Renovate and certified
9. Certificate of Occupancy
10. Bond refunded
To read my story and see some photo's :
http://www.propertydivas.com.au/6Share/ReadStory.aspx?story=552ef318-f398-49f7-ac5e-0e26648bf387
AmandaBS
Participant
@amandabs
Join Date: 2005
Post Count: 549
May 13, 2007 - 3:51 am
Ouch!! What a mess!!
What you've done is borrow funds to make a super contribution, rather than borrow for an IP. Normally such a strategy would only be used if you operated a business through a company/trust etc. and then borrowed funds to make a super contribution which would be tax deductible. How was this $350K treated when paid into the S'fund?
My advice would be to seek the advice of a new Accountant, someone with superfund experience.