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You're not buying an investment, you're buying a lifestyle or dream. So your issues are whether you are willing to pay the price ie payments on a loan etc and whether the property you buy will still be able to be used for your dream in 5-8 years. Check the property has a building right, keep an eye on proposed changes to zoning and object if they take away your building right. Find out from the government department what their plans are. If they are buying up in the area there must be some kind of document saying what they are buying and how much they intend to buy.
If I bought I'd probably look at getting a DA approved sooner rather than later first to reduce the risk of zoning changes and second so if there was a resumption by the gov't dep't I couild argue there was a higher value.
You would have two options:
a. treat your original property as your PPOR until sold – exempt from CGT. Therefore your second property would not qualify for CGT exemption until sale of first, but (during such periods as you had not received income on the second property) your rates, interest, insurance, repairs on the second would form part of its cost base
b. treat your original property as ceasing to be your PPOR in May 2007. This means the cost base will be set at its value as at that date, so you may or may not have a capital gain depending on what has happened between May 2007 and date of saleCan i suggest you speak with someone who is experienced in the advantages and disadvantages of withdrawing from super and can look at your whole circumstances. It might be more advantageous to borrow and get negative gearing and then have your husband convert part of his super to a transition retirement pension.
Two things to consider:
a. are you going to keep the property for the term of the fixed interest rate
b. what is your worst case scenario for interest rates. Last year interest on variable went up to around 9%. So, if you're borrowing at 5% say your repayments would almost double.
I've decided on my borrowings to lock in 2/3rds for 3 years and have 1/3 variable. If interest rates don't move then over a year it will cost me $5K. Cheap insurance considering how volatile interest rates were at the beginning of 2008.
If variable goes up 1% it will cost me $1K over a year. If variable goes up 3%, then over 12 months I will save $5K. My other strategy is to put as much as possible into an offset for my variable.
Am I right to fix? I don't know. Can I sleep at night by fixing? Definitely
Vacant land may be simpler but it also might be more complicated as you will need to ensure there are no issues with the land or zoning that will prevent you or a purchaser from you building on it.
A kit will probably cost at least $100. I will do my own conveyancing in NSW because I have done a substantial amount of NSW conveyancing. I would not do conveyancing in another state because I'm not familiar with their processes.
From my reading of your post:
a. your fiancee's IP is in her name and her father's. If this is correct, how is the rent being shown in their tax? If her father is showing rental income from the property then if he transfers his share in the property there will be CGT consequences unless he has previously, say at the time of purchase, entered into a contract to sell his share. What shares do they hold the property in?
b. if you get a second place, is this going to be a PPOR or an IP. If an IP, the ownership will depend on yours and your fiancee's financial situations and plans. eg if the property will be negatively geared it may be best to be in the name of the highest earner, but if you think it is going to rise in value and your fiancee is going to take time off work for children in say 5 years and you intend to sell it when she is not earning other income maybe it should be in her name.
From memory (and it's several years since I looked at this issue and then I was looking at the issue of remote housing benefits) there is a determination or ruling (possibly a PBR) that states that in these circumstances the employer would lose the exemption on Fringe Benefits Tax. The isue possibly is that you the employee are an associated person with the landlord (the trust).
If your trust will make losses why do this anyway?
Since your husband is getting a presumably tax-free LAFHA which is subsidising most of your accommodation costs it may make better financial sense if you are interested in property investing to look to purchase somewhere else rather than in your particular location in WA
I am sorry but adverse possession exists. There might not be many instances of it publicly, but it still exists.
Depends on State you are in. Who did the fencing? In NSW standard contract provides if a valid notice is given after contracts are signed purchaser could be responsible. Talk to your solicitor or conveyancer.
Hi Terry,
I think the 2008 Federal Budget eliminated your ability tio claim depreciation when your employer has reimbursed you.
I seem to remember the pant & equipment had to have a minimum value in otrder to get teh investment allowance. I tuink the 50% is based on the company turnover too.
Also if Trust B has a taxable income of $100,000 (received from Trust A) and does not distribute this, Trust B will pay income tax on the undistributed income. You haven't found a "HUGE gap in the taxation system" – you have not done enough reading. Tax law is indeed an area where a little knowledge is dangerous.
We had 3 walls bag rendered when we bought our PPOR 3 years ago. Painted them as feature walls. It did not affect rental when we made it an IP at the end of last year. A plastere we got in to do some work reckoned he could have gyprocked the walls quite cheaply for us
how long is a piece of string? What type of renovations/repairs? Talk to your agent about what you want to do and whether it will make any difference. What are other houses selling for that are similar to yours? If they are in better condition are they selling for more than the current price you can get plus the cost of the repairs/renovations?
S 151 Duties Act Qld only gives an exemption if the spouses will then hold the property jointly and it is their PPOR.
I was under the impression that this had been stopped by the 2008 budget for arrangements like that entered into after the budget and for people who had been already doing that that it stopped from 1 April 2009
Your relative will need to consider impact on Centrelink benefits if they are claiming these now or in the future
One comment – if you're thinking a CP investment returning 6% p.a makes sense it doesn't make sense to me. CP is riskier – potentially longer vacancies and the return needs to reflect that.
How has 2 and a half years happened. Your post says Dec 2007, now is May 2009. This is only 17 months.
If your parents are or will be relying on a government pension get some advice as this will affect their pension rights
If you are making additional payments into your loan and then doing a redraw for private purposes that part of the interest on your loan will be non tax deductible. An offset account on your loan would allow withdrawals on the offset not to affect the tax deductibility of the interest on your loan
