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Thanks Michael and Terry for your constructive comments, really appreciated.
thanks for advice re. insurance it's something we will certainly be looking into. We also checked with the bank, and they're not charging double fees.
Both mortgages will be interest only. To clarify, the IP1 NSW is 50/50 the IP2 QLD 90/10 (in favour of my husband). Does this still mean that it makes no difference where the offset goes against?
thanks again
Thanks Tony / Richard – really appreciate your comments. As you can tell, we are relatively new to the property game but very keen to learn and build a portfolio.
To clarify, yes the property is jointly owned and we are in NSW – not sure whether that means you have to pay stamp duty on spousal buyout? Seems like if nothing else, we will switch our mortgage to IO – so thanks for that.
Richard if you could clarify why we should keep the 100% offset account when we switch to the IO mortgage – as would this not reduce the amount we can claim at tax time as the interest has been reduced.
As a little background, my husband has only got 1 year s/e accounts (now halfway through 2nd year) so our mortgage is based on my income only. We were in the process of buying our first IP a couple of months back (as keen to get this before I went on maternity) but it unfortunately fell through and we haven’t found anything in it’s place.
Subsequently, when I leave work in January, we will have limited serviceability and will unlikely to able to get an IP until June 2011 (when we’ll have 2 years accounts for the business). So our “plan B” was to rent out our PPR, but given now that it will be slightly positively geared, I’m now not sure if this is going to help much from a tax perspective. I think we need a ‘’plan C’’
The other reason for moving into rented is my husband works from home, so could then claim a portion of the rent back (which we’re not currently doing on PPR as advised his would affect capital gains down the line) so we have to take that into consideration too. As you can tell, we’re so keen to get things moving in the right direction as first baby is due in 10 weeks and to effectively utilise the equity and savings that we do have to – but we don’t have the knowledge to know what to do for the best. Our current accountant has been very disappointing and seems quite against property as an investment – so we need to change –
Does anyone recommend or know of anyone in Sydney that offers a mix of advice on business, tax and property all in one?
Thanks again for any helpful ideas/thoughts
