[eyes2theskyMember@eyes2theskyJoin Date: 2008Post Count: 11]

November 9, 2008 - 10:24 pm

Thanks for your responses, Michael & Roslynn

You're right – I just need to sign up! I'm sure I will benefit from the material.

Thanks guys,

eyes2thesky

[eyes2theskyMember@eyes2theskyJoin Date: 2008Post Count: 11]

November 9, 2008 - 3:34 am

Hey Guys,

I had an incident with using the 'and/or nominee' option with a contract not long ago and was advised by a solicitor the following:

If you do put 'and/or nominee' on a contract, the nominee needs to be in existance at the date the contract was entered into. i.e. if you signed the contract on the 1 Jan 08, the nominated entity you decide to purchase the property in must have been in existance at the 1 Jan 08. So you can't set-up the entity say a week later. I guess your nominee has to be viewed as the purchaser from the contract date and how can it sign a contract of it doesn't exist?

Has anyone else come across this? Is this advice correct?
(sorry i'm detering from the main question but thought it a good opportunity to ask)

eyes2thesky

[eyes2theskyMember@eyes2theskyJoin Date: 2008Post Count: 11]

September 4, 2008 - 10:19 pm

bluedog47 wrote:

agree v8ghia,
it is pretty sad it takes days to have phone calls returned and even emails, you'd think they would all have a computer at home.
Just a word on the seminar thing as well, with this mob its not actually a seminar they get a half a dozen couples up for the weekend but the whole thing is done in one day, roughly 7:30am salesman picks you up from motel, then taken and interviewed by customer relations person and he tells you how you can do all the investing how it works and you ask questions, the finance person goes through all your stuff, comes out and says how much you can borrow to invest, you are then taken by the salesman again to the house where-ever that fits in with your investment bracket, on the way back you are taken to see a soliciter papers put in front of you and you sign up, with your normal cooling off period etc. taken back to the office for some more signing and reassurance and then dropped off again, at no time do you meet with other couples, allthough you could see them being lead around as well. it was all done by about 3pm in my case. As I said I'll keep you posted either way, if it's a good thing people should find out, if it turns bad as far as I'm concerned everyone will know, I worked hard for my money and want to retire in about 12 years when I'm 60.
Cheers
Bluedog

Apologies that i'm a bit late to put in my 2 cents…..

However – there are now so many of these property investing crews out there…..
My husband and I went through this EXACT same process! Not with this crew though…. another one in the Brisbane area. I was laughing while i was reading your post bluedog because ours was exactly the same process…. except on the way back to the office where they had arranged for us to have a solicitor to go through the contract with us they stopped off at an atm for us to withdraw our cash deposit! Talk about pressure! This was when we started thinking this just isn't right…. We were a bit new to the property investing game and i guess a bit gullable… It was 5pm, they'd picked us up @ 7am and i was just tired and wanted them to take me home!

However there was a cooling off clause and during that time we did some really good research regarding the area and did our own calculations as to how much we could build it for without their help – we even contacted the same builder who these guys were going to get to build the house and got a quote for a home of very similar size and features. We discovered that there was $40,000 in it for them! I know they don't work for free…. I was happy to pay a little premium in order for them to do the process for me…. but $40k?! Now that is a bit steep. And i'm sure it's even more than that as i've used builders prices to the public – not rates mates i'm sure they have agreed to between themselves.

And from reading other experiences with these guys, it seems you don't really get much assistance for this premium price tag either?

Mel

[eyes2theskyMember@eyes2theskyJoin Date: 2008Post Count: 11]

September 2, 2008 - 6:14 am

BuilderBob wrote:

melhart wrote:

Hey guys,

I've actually been eyeing off Moranbah for awhile now. We used to live in Mackay so we had a good idea of what went on out there (company's leasing houses for miners) and the higher rate of rent charged.

I've found this thread very interesting – thankyou to all who have contributed. And it has fired up this Moranbah IP idea again.

So i've been doing some research and talking to the local council and real estate agents – and can someone share with me what in the world is going on out there? It may be just RE agents trying to get me excited – however i've spoken to a few in Moranbah and a few in Mackay who concentrate on Moranbah properties and there is NOTHING available to buy or even to rent! I'm being told that the properties are hardly on the market for a couple of days before they are gone! Some don't even make it to realestate.com. I was told by one RE agent that there is another shopping centre being built shortly and a new school (however the council didn't confirm this part) to cope with the growing population from the new mines being opened. Apparently one mine is being opened just near the BP on the ouskirts of town.

So are these RE agents pulling my leg, or is demand far outweighing supply right now?

Sorry I call BS on what they are telling you.
Just out of interest who is actually feeding you such details , I hope it's not Donny from Century 21 or those Elders girls who are to lazy to drive out to Moranbah.
Sure there is are things in the pipe works going to happen , but the fact is there are many houses on the market in Moranbah and some have been sitting idle on the market for months.

Rentals are about but they are asking a lot , this being the reason they are vacant.
example:
08/09/07  $580 / Week – 13/08/08 For Rent $875 / Wee
94 MILLS AV, MORANBAH 4744

22 LESLIE DR
16/04/08 For Rent
$900 / Week

Property for sales remain in fairly good amounts with just a quick look, I note in just a small area:

3 in Oxley drive
3 in lawrence st
5 in Archer drive
3 in Belshore st

My sister in law worked as PA for Don Agnew last year…… she didn't have anything bad to say? However, i guess she's seeing him from a different perpspective….

But anyways, no it wasn't him. It was mainly RE agents in Moranbah. And those that i did call who were based in Mackay were actually in Moranbah at the time of calling! Trying to pick up some new listings.

And those properties on realestate.com – already called about all of them – all sold within 48hrs – they are a bit slow to update the status of them unfortunately…..

I too have noticed some idle and not selling…. however these are the properties were vendors are asking $500k+ (i saw one for $750k – i think somebody's dreaming) for really nice new houses. What company wants to lease a nice house to miners who couldn't give a hoot about looking after it?

My brother-in-law is actually working out at Dysart at the moment and he has caught wind of a rumour that they are thinking about building a nice airport at Moranbah for the miners to fly in and out…….. hmmmmmm….. what will the effect be on rental returns and capital prices if that happens? Just a rumour, but i'll be keeping my eye on any Moranbah news just in case……

[eyes2theskyMember@eyes2theskyJoin Date: 2008Post Count: 11]

August 29, 2008 - 3:56 am

Hey guys,

I've actually been eyeing off Moranbah for awhile now. We used to live in Mackay so we had a good idea of what went on out there (company's leasing houses for miners) and the higher rate of rent charged.

I've found this thread very interesting – thankyou to all who have contributed. And it has fired up this Moranbah IP idea again.

So i've been doing some research and talking to the local council and real estate agents – and can someone share with me what in the world is going on out there? It may be just RE agents trying to get me excited – however i've spoken to a few in Moranbah and a few in Mackay who concentrate on Moranbah properties and there is NOTHING available to buy or even to rent! I'm being told that the properties are hardly on the market for a couple of days before they are gone! Some don't even make it to realestate.com. I was told by one RE agent that there is another shopping centre being built shortly and a new school (however the council didn't confirm this part) to cope with the growing population from the new mines being opened. Apparently one mine is being opened just near the BP on the ouskirts of town.

So are these RE agents pulling my leg, or is demand far outweighing supply right now?

[eyes2theskyMember@eyes2theskyJoin Date: 2008Post Count: 11]

August 1, 2008 - 7:14 am

The ATO will look where your refinanced borrowings have gone. If the additional borrwoed funds are used for private purposes – non-deductible. They don't consider what the security of the loan is but what the borrowings has been used for.

[eyes2theskyMember@eyes2theskyJoin Date: 2008Post Count: 11]

July 28, 2008 - 3:28 am

Hey Ambers,

Well, as your original purchase was for residential only, it's likely it was an input-taxed purchase – which means no GST.

However if you sell a portion with a new dwelling on it, it converts it to a taxable supply (the sale transaction only) – GST applicable. So your sale price would include GST. i.e. if you sold it for $550,000, then $50,000 would be the GST component sent off to the ATO and you would have $500,000 cash left to include in your CGT calcs. Not very pretty, is it?

Selling it with plans sounds good. As you said, no holding costs and it would remain as an input-taxed transaction therefore no GST implications for you on the sale.
But then again, as Steve says: It depends. How much value-adding can you achieve by putting a dwelling on the block? How quickly would it take to sell the vacant block?

Don't forget that there's some great CA's out there too (not just CPA's).

Good luck!

[eyes2theskyMember@eyes2theskyJoin Date: 2008Post Count: 11]

July 27, 2008 - 4:44 am

Hi Ambers,

This is a complicated area! I would suggest seeking professional advice from your accountant or finding one who specialises in this area.

From my own private research I have discovered that yes, the sale of residential properties are input taxed (not subject to GST), however the sale of a *new* residential property is a taxable supply (a sale attracting GST). The ATO website has lots of helpful information, however you really have to dig to find it.

As for CGT, now that's a tricky one.
Yes, you would add the cost of construction of the dwelling to your cost base of the asset which would also include the "cost" of the land. This value can be determined by apportioning the cost of the total block between the new lot and your home.
The question is, does the 12 months (for discounting) start from the completion of construction when the property is ready for it's intended use?
If we were just selling the subdivided land on it's own, the date of acquisition for the new block is considered to be the date you first purchased the whole lot, but what about when you've put a house on it?
Has anyone come across this before?

And yes you are right. You have a choice between using the indexation method or 50% 12 month discounting method. The choice will require some number crunching!

And I hope you have some luck with the ATO tomorrow.

[eyes2theskyMember@eyes2theskyJoin Date: 2008Post Count: 11]

July 27, 2008 - 3:20 am

Womma wrote:

As I understand it, you can do as you say with the biggest disadvantage being that you can not get the capital gain deduction if you sell the place through the trust. 

Trusts are entitled to the CGT 50% discount (from holding asset for 12 months or more) just the same as individuals. It's only companies not entitled to discounting (and of course SMSF's only 33.33% discount not 50%)

The main disadvantage of holding property in a trust is that you're not entitled to nominate it as your PPOR – ever.

If the property is negatively geared you'll be accruing losses in your trust which is useless unless you want to use the trust now or later for another business purpose to be able to soak them up.

If the property will be positively geared (or becomes positively geared), you will need to be careful because I think there's a possibility you may pay tax twice on your income. i.e. Hubby earns wage which is taxed in his name. Rent is paid from post tax dollars to the trust and then the net rental income i would presume would be distributed to wife who would then possibly pay tax on this portion of income again (if wife's Taxable Income is over $6,000). Effectively we're creating additional income without receiving any cash in the pocket!

Trusts are also used to help in asset protection (depending on who the trustee is), however if you're renting the property yourself there's no risk of being sued. And if you do purchase further investment properties in this trust, this property you're living in may be at risk.

Have a sit down with your accountant and they can thouroughly go through all the pros and cons for your current situation and come up with a solution also considering your future investment plans.