Forum Replies Created
Maximum, you are only ‘up for’ CGT IF you sell – if you live in a house after it has been an IP, that is FINE – but WHEN you sell, you pay CGT on a proportional basis…ie…don’t sell until you retire, your marginal tax rate will be minimal, you pay CGT on HALF your capital gain at your marginal tax rate…proportional on the amount of time the property was IP/PPOR. ie house bought for $50,000, house sold for $200,000. Capital gain $150,000. Pay tax on HALF, $75,000, at marginal tax rate. House rented for 10 years, lived in for 5 years.
1/3 is tax free, 2/3 has to be handed over.
Of course, all your improvements, purchase costs etc etc come out of the ‘profit’ figure before any tax owing is calculated.
Hope this helps.
If you die, and your kids inherit the house, I’m not sure what happens….ring the tax office.
Kooringal.
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I think I’m more confused now than before I asked the question, lol. To clarify, I live in Sydney and the I/P is in Brisbane, it has been rented out from day one (I have never lived in it), but if I moved into it at a later date and did not sell, I should NOT be up for C.G.T. Is that correct?
Thanx[/quote]
[Hi Dave C, good to hear your story, and thanks for letting me know you and AD are ‘locals’…maybe let us know if there is an exciting property meeting on in this neck of the woods that would suit someone like us…and doesn’t cost TOOOO much money?
(‘kooringal’ is the name of the little shack we recently bought at moffat beach at caloundra – apparently it means ‘place near water’…)
it’s my inspiration – when I want to buy a mars bar, I think, that’s $1 that could go towards kooringal (well…sometimes when i want to buy a mars bar, I think that…other times I buy a mars bar and a packet of jelly babies…)
you guys sound so POSITIVE, it is just so lovely to hear people being positive about buying houses – as I have previously mentioned, almost all of our friends are NOT property people, not that I know if we are either, but we would like to be…
our friends have NO interest in discussing houses, strategies etc, they think we’re mad, so there’s no one we know ‘like us’ we can talk to, which is why I can’t believe how fantastic this forum is, how much knowledge there is out there and how many good ideas and how generous people are with passing on good tips.
that ‘michael and kaye’ are fantastic too, i love reading their posts – where are you guys from?
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Hi KooringalBoth AD and myself are from the northern suburbs of Brissie. Not sure if there are any others out there on the forum lurking….please identify yourselves if you are out there…..
Take care
Dave [
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[/quote]Yes, it was. Please don’t tell me you bought it?
quote:
Hi Kooringal,
The duplex wasn’t on Shaw Road was it by chance??Enjoy
AD [:0)]
(Andrew)“Character cannot be developed in ease and quiet. Only through experience of trial and suffering can the soul be strengthened, ambition inspired, and success achieved.”
Hi Fullout, I’ve done the conveyances on our last three transactions, a sale and two purchases…ie I’m one of those ‘self acting’ after getting pissed off with slack solicitors…it is DEAD easy and CHEAP doing it yourself…IF you have straightforward properties, ie same family for 100 years etc, which ours have been so far.
I was SO excited about attending my first settlement. Hubby and two kids in the car, while I ran into the building. They searched for a park in Brisbane city…they were still doing the block looking when out I came out again…settlement all over…what an anti-climax for me!
IT’s all done by secretaries – your bank will send their junior with a cheque to pay for the property, she will receive the title (if there is a wee slip of paper, some people don’t even have a paper copy these days) (you can ask for a photo copy if you want), and Bob’s your uncle, all over.
Basically, you pay a deposit on ‘buying’ the house.
You then get all your searches done (or your solicitor does).
You work out who has to settle up with whom on the rates and water etc, for example
Purchase price $100,000
Less deposit $10,000 (paid to r e agent)
—$90,000
Plus rates reimbursement owing $200
—$90,200
Less water levy $20
—$90,180.Settlement figure is $90,180.
The vendor (‘seller’) will tell you (or your solicitor) how he wants the cheque(s) made out
ie maybe $380 to Smith Legal firm (to pay his legal bill) and $89,800 to him, the vendor.Don’t forget the real estate agent is still holding your $10,000 deposit in his trust account. When both sides advise ‘settlement has taken place’ to their satisfaction, the agent ‘releases’ the deposit money to the vendor, minus his commission.
ie $10,000 owing, minus $3500 commission, you get $6500 out of the deposit held by the real estate agent.
hope this is helpful.
Kooringal.
if i dont attend the settlement, how will the rest the purchase price be paid, and the other stamp duty fees etc?
I am taking a loan of 80%, with 5% deposit already paid. 80% i assume the bank guy will give a cheque to the seller. WHatabout the rest? Do i pay my conveyancer first now? WHatabout the other fees?(see above for basic process…your conveyancer will work out a settlement schedule more or less as above…he/she will ‘book’ settlement with your bank about a week prior to the ‘big day’ ie tell your bank when and where settlement will take place and how the vendor wants the cheque(s) made out…your conveyancer will attend settlement on your behalf. Your conveyancer will do a last minute ‘title search’ on the way to settlement ($10 and 5 mins work at titles office), to make sure the vendor hasn’t done any dirties on you during the contract period. Your conveyancer will give the bank the ‘clear’ titles search. Your bank will give the vendor’s conveyancer the cheque for the ‘settlement figure’. The vendor’s conveyancer will hand over any keys and title (if it exists in paper form).
Your conveyancer will send you a bill after settlement takes place and you will pay it.
Hi Y’all, anybody out there from northern suburbs of Brisbane??? We’re in Stafford and would love to email/talk to any other couples/families in a similar situation to ourselves.
We’re late 30s, two little boys 1 and 3 yrs, hubby is an engineer and mum is a stay at home mum, but part time journo, working odd shifts on weekends when dad can look after our little treasures or my mum can come down from toowoomba to help out.
We have 3 mortgages, all cash flow negative. I’ve read Lomas and this forum, but too late to know what I was doing…so…for now, we’re sitting, and wondering…etc.
We have our PPOR, with mortgage, and four investment properties, since we got together later in life. Two are paid off and two are negatively geared – fortunately they are in my husband’s name and he is the main breadwinner, but…
I LOVE looking at houses, smelling them, buying them etc…equity is not a problem for us, servicing the debts on one income is…so I need to suss out this ‘positive cash flow’ thing a bit better.
I’ve read some of Geoff Doidge’s stuff and I’d LOVE to do one of his courses, but I couldn’t justify spending so much money in our current ‘tight’ situation.
We’ve done up and sold two properties in the last two years, and we’ve done up two of our current investment properties and our ppor a little bit too – just cosmetic things, nothing serious.
We recently bought a great little beach shack at Caloundra – it’s heaven – but seriously negatively geared – mortgage $540/wk, gross rent $250/wk – I can hear you all groaning – but what a magic spot, I can see myself as an old lady, writing books, looking out to sea, watching the grandchildren frolic…mind you, if they wait as long as I did to have kids, I’ll be in a nursing ome, not at Moffat Beach!
So, I’d LOVE for us to be able to buy another property, but it would HAVE to be positively geared or near to, or we would die under the burden of servicing the loans.
We expect to pay off our PPOR within 2 years, and the other two mortgages can just languish until we can think of a better plan.
We’re thinking of transferring the ‘paid off’ investment property in my husband’s name into a trust, so the income can come my way, since I am in a much lower tax bracket.
The other ‘paid off’ property is in my name, it was our former PPOR, and we are about to rent it out, so I’m doing the Income tax assessment act ’97 S 118 – 192 bit of ‘FIRST TIME you want to rent out a PPOR, you get a valuation, and that locks in any previous capital gain, and when you eventually sell, the valuation forms your cost base – got that tip from a Lomas book, and checked it with the tax office, VERY timely for me, as I was about to pay heaps of money to set up a trust to gift the property to, and heaps of money in stamp duty, all to ‘lock in’ the substantial capital gain that has happened in much of Brisbane over the past couple of years – and in fact, I don’t need to get a trust set up at all, just get a valuation and start renting…
NONE of our friends ‘like’ property – they think such people are ‘slumlords’ – when I knew less than I did now, I let a friend talk me into selling a duplex in Wavell Heights – cost me $120,000 5 years ago, rented for $125 x 2, and I sold it for $149,000 JUST BEFORE the boom because no agent or friend thought it was worth hanging on to – I’d never heard of Robert Kioysaki then, or about positive cash flow or anything – how many times have we all said ‘if only I knw then what I know now…’ About a year ago, that duplex was onsold for nearly $300,000 – so I am quiet about our plans with our friends now, because they think anyone with more than one home is a capitalist pig, trading on the misfortunes of others…they think we are fools buying slums – but they are ‘character’ houses – we just can’t afford to do them up as we might just yet…
I love being a mum to our two boys, I love houses, and I thank God I met my husband or I would still be wasting all my money on having fun – now I love having mortgages, it feels like he might be able to retire one day, and we want to be independent in old age.
We wish you all good health and success, thank you for all the great ideas, generous in the extreme,
Kooringal.
Laurie, my other problem is…I think I have been trying to be toooo clever…when I bought the investment property, we decided to move into it, to pay less stamp duty, for a year, ie one pays less stamp duty in qld if the home is to be owner occupied as opposed to investment…so…we left our PPOR, to move to the new house for a year, to satisfy stamp duty requirements…leaving the old PPOR ’empty’ ish so we could do it up while we were living over here, and we actually have a friend in it who is paying us some board as well, so that is handy too, cash, we get to leave our junk there and do it up at our leisure, and we get a bit of board from johnno as well…BUT…we’ve now decided we don’t want to go back to our old PPOR – the ‘investment’ property we bought actually suits us better, bigger, big garage etc…so now I’ve got to do something proactive with the old PPOR, ie get rid of our stuff, get rid of Johnno, and rent it officially.
My understanding is that I can rent my PPOR out for up to 6 years and still sell it capital gains tax free ONLY IF I AM NOT MAINTAINING ANY OTHER PPOR – and since I am claiming the house we are living in now as a PPOR for stamp duty purposes, I don’t think I can keep the old ppor as my official ppor for cgt purposes…??? if stamp duty talks to the tax office…i come undone.
Also, it is unlikely I will want to either sell the old ppor or move back into it over the next 6 years, so I am better off switching the old PPOR into an ‘investment’ property now, or selling it to a trust now – you have six months when moving from one PPOR to a new PPOR to sell the old PPOR CGT free – so I ‘gift’ it to a trust now, or I get the valuation and rent it from now and my capital gain is protected anyway, which is all I want, that the capital gain that occurred while it was my PPOR is protected.
The house we are now living in will also have a big capital gain, so we will not lose out. It has already appreciated probably $100,000 in the past year, we bought just in time in this suburb.
Thanks for your feedback, laurie
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KooringalSomething to note.
My understanding is that your PPOR does not have to be house you are living in.
You are only entitled to one PPOR, however.Scenario
PPOR for many years, buy new PPOR and rent old one. Do a valuation of old PPOR just in case 6 months after new PPOR purchased.
You do not have to select which property is PPOR until one is sold. You can rent old PPOR for up to 6 years before returning to it if it is earning income (otherwise indefinitely).
If for some reason you choose to sell the old PPOR within this time period, and it has grown more in value than the property you are living in, it can still be your PPOR and no Capital Gains will apply. However the lesser gain on the house you have lived in during this time is subject to capital gains at a later time when you sell it. However this amount is diluted over time as this house becomes your PPOR from the date of sale of the older property.
If you transfer the older property into a trust this option is then closed to you because a CGT triggerring event has occurred.
I am also fairly confident that a PPOR must be in your own name, ie a trust cannot have a PPOR unless it is a ‘bare trust’ and the beneficiary occupies the property (TD 58) or deceased estate.
However, ensure you check with a professional
Regards…
Laurie
[/quote][HI Glenn,
having had some VERY ordinary experiences with property managers, I am now managing two properties ‘by myself’.
So far, all is well…I take care of my places, I CARE if something is broken or not working, because I want my place looked after, and I want my tenants to come to me if there is any problem, I check the bank account to check the rent is going in, I give the neighbours my contact details and say if there is EVER any problem, feel free to ring me any time of the day or night, I tell the tenants the same thing, mind you, I choose tenants who seem ‘handy’, I don’t choose tenants who whinge about their current situations (I hear alarm bells) etc.
I rang Residential Tenancies Authority (Brisbane), who are on the ‘tenant’s’ side, I guess, but they send out all the paperwork you need, ie contract, the form for bond, all the rules about managing a property to protect your rights as landlord and the tenant’s rights etc.
I have rung them many times to check on little things, if I can do this or that, and I have always found them helpful.
I also advertised myself for tenants. I was ‘positive’ but ‘honest’ when people called about the property. I asked them what sort of property THEY were looking for etc. eg one of the houses I rent out is VERY small, 2 VERY small bedrooms, a VERY small garage, no storage, it is fenced, ie suit a dog etc.
I had MANY calls from couples with a kid and a big Pajero…desperate to live in a cute house by the beach. One man got quite abusive with me when I told him he was very welcome to come and have a look, but I really couldn’t see that my place would suit his family…(too many people, lots of belongings, big car – he would have been miserable in my place and the cuteness would have worn off VERY quickly…)
If you are good at sussing people out without appearing to be discriminatory, you can find a person that ‘suits’ your house, and if you think they will be happy there, and you guess right, your job as property manager has just become that much easier.
I was NOT prepared to take the first thing, which a property manager, in my experience, IS prepared to do.
When people came to see the house, I took their details, I asked them questions, and I told them I would let them know by…xyz date, and I did.
I told them all I wanted to find the right person for my house, because it won’t suit everyone, and I wanted my eventual tenant to be happy blah blah blah.
Now, I got a single mum with kid and visiting boyfriend, a couple of boys on welfare, rich couples with big cars, etc and a single guy with dog – he suited my place, it was meant for one person, and he could afford the rent – i had priced it above market, figuring I could always come down, but I didn’t have to.
I asked for references, and I got two, his current employer and his previous two landlords, his drivers licence, a credit card, and I asked for two recent pay slips. he provided all and all checked out. You CANNOT be lazy about these things. Now, he might be on some ‘tenant blacklist’ that I can’t access, but all seems to be fine so far…
I was worried I might be ‘discriminating’ against the single mum, the boys on welfare, etc, but I rang Residential Tenancies about that, and they were good. They said I was quite entitled to choose the person I felt best suited my house, and that’s what I did, and it’s working so far, fingers crossed.
I was a bit embarrassed to ring the ‘unsuccessful’ applicants back, but there is always an excuse to let you and them save face – ie thanks for coming to see my house, at this stage I’ve let the house to someone else – he was happy to take a 12 month lease and you preferred 6, or he was happy to take the propety from today and you preferred next month, or whatever, but thank you again, if anything changes, I’ll get in touch.
With the tenant I chose, I was very up front. I didn’t pussy foot around. I filled out an entry condition report and asked him to sign – all these papers come from residential tenancies – I charged him the 4 weeks rent as bond, I told him I wanted 2 weeks rent in advance, I told him I wanted the house left in the same condition when he left, I showed him photos I had taken, and I said I would make a claim on his bond if there was damage other than fair wear and tear.
I told him I hoped he was very happy in our place and to please let us know if he wasn’t, we are very reasonable, we will help if we can etc.
I sussed out at the time he looked over the place if he was happy to mow, etc, and he was.
Look, so far, it is going fine with both houses i ‘manage’ myself.
The two houses we get ‘managed’ are in a country town and there is only a choice of’bad’ property manager and ‘appalling’ property manager, both claim 9.5 per cent, plus expense, and both do NOTHING to ‘manage’ our properties.
I am doing a MUCH better job, in a tougher market.
If I were you, I would give it a go doing it yourself…that’s what I decided to do because I was so disgusted with the service I was getting from the agents at the beach, and I am still disgusted with the service I am getting from the agents in the country town, and I am MUCH happier with my service, that is for sure.
I think agents try to ‘scare’ you with how much they can do for you (but they don’t) and how much they know (which many of them don’t) – get informed about YOUR rights and your tenant’s rights.
IF you are going to let the ‘single mum’ stay on, if you are a WUSS, get the property managed. If you think you can be kind and fair but UP FRONT, do it yourself. If you can’t speak up for yourself, DON’T do it.
The bond will have to be refunded from the agent and paid to you for you to send in to Rental Bond AUth. Get the tenant to sort that with the agent, I think you can get it transferred, but why take that on, get her to sort it out and get the money to you asap, up to you, check it out with Rental Bond and do whatever is easiest, but look after yourself, this is your BUSINESS.
Do an inspection when her lease expires, talk to her about what is working and what is not, fix what needs fixing, set limits on what you will not fix, if she wants something you think is not reasonable, tell her you can do it, but the rent will have to increase by $20/wk, or whatever (by the way, if you increase the rent, I think you have to give about 2 months notice…in writing, so do it now if you are going to increase the rent). Be very up front. Tell her you love your house, you want her to be happy in it, you want the rent two weeks in advance, agree on the condition it must be in when she leaves etc, BE UP FRONT!
Now, a single mum would not be my choice of ideal tenant…but one isn’t allowed to discriminate, and there are single mums and single mums.
I am sure many are capable, can ‘fix’ little things, ie you don’t have to run over every 5 mins for a blown fuse, and have steady incomes…some are not.
I had a bad experience with a ‘single mum’ – yes, I gave in when the AGENT told me I had to give her a try, such a nice girl, etc – she did a runner, went to court to get the lease broken under ‘hardship’, just before xmas, what about my hardship??? this was my first property and things were VERY tight for me too, didn’t damage the place or anything, but didn’t clean it either, and the agent had another no-hoper all lined up very quickly and I just said NO, NO, NO to everything the agent dished up for the next 6 weeks – it took me (her) 6 weeks to find someone I thought seemed OK – no more leaving it to an agent – and the guy I got eventually was excellent, he only left when I eventually sold the place…
anyway, i could rave on for hours and i already have, email me if you have anything specific you want to ask, [email protected]
Good luck if you decide to give it a go yourself – you can only be wrong and it might all turn out very right, as long as people know UP FRONT what is expected of them, I think it’s a good start.
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hi everyonei’m currently pondering if i should use an agent to rent out my property or do it myself?
the agent wants the first weeks rent and 7% every week after that (about $10)
i just purchased the house and the single mother still has 2 months left on her contract and wants to sign on again long term.
so i think i will be able to take care of everything myself (if i had to find a tenant it might be different) so can someone please help me out if they have an existing contract they use when renting out privatly or atleast somethings i would need to include or beware of
thanx
[email protected]
[/quote]Laurie, old PPOR was inherited in Sept 1999, so well after 1985. The big capital gains occurred in Brisbane, as most other places in Aust, over the past couple of years. It was probably worth a bit less than $200,000 then, it is worth about $500,000 now.
We moved to another house 6 months ago to do it up while living in it, and to leave the original PPOR empty to do up too, but now we’ve decided to stay in the new ‘ppor’, we’ve done up the old ‘ppor’ and now we have to either sell it, to benefit from the tax free capital gain, which I don’t want to do, since it is a family home, built by my great grandfather etc, OR set up a trust and move it into that to ‘lock in’ the capital gain, which was the plan until a few days ago, OR…I’ve just found out I can simply get a valuation on the old PPOR, then turn it into a rental property, and when/if I eventually sell, my capital gain is only calculated from the time I get the valuation to when I eventually sell, ie, I ‘lock in’ the tax free capital gain that occurred when it was my PPOR WITHOUT having to sell the property, which I like.
BUT, I like the trust structure too, because if we go into business in a few years, the house would be ‘protected’ to a certain extent, not that we would be planning to fail, of course, but one never knows…
BUT, if I transfer house into trust, there would be about $18,000 Stamp duty applying, which is a lot of money.
When Micheal said there was a way to transfer a PPOR into a trust STAMP DUTY FREE I was interested.
If anyone knows if this is possible, pls reply, or email me at [email protected]
Thanks, Kooringal
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KooringalWas old PPOR purchased on or before 19 September 1985.
If so NO capital gains will apply. Whether you sell it now or later.
However if you transfer it to a trust it will start to attract CGT from the contract date of sale to the Trust.
Regards…
Laurie
Hi Michael, how do you transfer your PPOR into a trust FREE OF STAMP DUTY?
We have moved from one PPOR to a new PPOR and we have six months to dispose of the old PPOR capital gains tax free, and there has been a huge capital gain in the old place while it was our PPOR, so without selling it, we wanted to ‘lock that in’ somehow…
So what to do?
First thought, which we have discussed with you before, was to set up a trust, ‘gift’ it to the trust for the current market value, which is 3 times what it was worth when I inherited it 4 years ago, pay the stamp duty, and write off the stamp duty as a big cost now of paying less capital gains tax in the future.
I only recently found out under S 118 – 192 of the tax assessment act 97 if I am moving out of a PPOR for the FIRST time, and if I would be exempt from CGT if I were to sell the house, I can get a valuation, and then rent the house, and when I do sell in the future, the new ‘base’ price will be the valuation, not the original purchase price, so I have effectively locked in the capital gain that occurred while it was my PPOR without having to either SELL, or SET UP A TRUST and pay STAMP DUTY.
Do I understand you correctly that there is a way of transferring the house into a trust WITHOUT PAYING STAMP DUTY? I haven’t read about this and no one has mentioned it to me.
Our old PPOR has been in the family since it was built and it is paid off and our ‘new’ PPOR is almost paid off too – do I understand you correctly that we could set up a trust, transfer this house into it some way without paying stamp duty, then ‘rent’ the house from the trust?
Both the old PPOR and the new PPOR are in my name, and I am presently a low income earner (ie a 40 year old stay at home mum of a 1 and 3 year old and we’re considering a 3rd, my husband is 35 and just scrapes into highest tax bracket), and a estate lawyer/accountant friend of ours has suggested we may not be better off with a trust, as these may be taxed at 30 per cent in the future, and my tax rate will be 0 percent or 17 percent (depending on how much part time work I may do over the next few years) for some time.
We don’t want to sell our old PPOR or our new PPOR any time soon. Of course, plans change, but we see them both as long term investments. They both have excellent prospects for capital growth. We expect to stay in our current PPOR, or move back to our old one, ie stay in this area, for the next 10 years at least, while our children are growing, unless something wierd happens.
Can you tell me any more about how one might transfer a property from my name, into a trust of which I am trustee, without paying stamp duty on the transfer?
And I gather, if the house is my current PPOR, I can then ‘rent’ it back from the trust?
What are the catches? What sort of questions do I ask my accountant?
My ini
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Hi Kooringal. As I mentioned earlier, there won’t be any CGT on the PPOR anyway when it’s transferred.When you move out of your PPR, you get a valuation. you can then rent it for however long you want
In our case, the valuation would be needed because the transaction isn’t at arms length, however, we are not moving out.The PPOR is transferred to the trust at valuation cost, no CGT, no transfer stamp duty, and we remain in it paying rent.
when you eventually sell, the cost base is the ‘sale price’ minus the valuation price, not the original sale price
Yes, that’s right. If there is no stamp duty payable on the transfer due to the correct trust structure in place, then it makes sense to have the valuation as high as possible, so future capital gains will be less than if using the original or recent price.or gift it to a trust (which costs heaps in stamp duty).
As I mentioned above, this should not happen to properties under $1M with the correct trust structure.Michael
Errrgghhh! A tough one. If you have been ‘renting’ the property out at about 30 percent less than market rate, because you are ‘unofficially’ the 3rd party in the house, but really you stay with your girlfriend while you are in town, you’ve been ‘getting away with’ not declaring income received from the tenants because it is your PPR and you are ‘sharing’ it.
As long as you are not maintaining a PPR elsewhere, ie all your mail goes to this address, you are enrolled to vote there etc, you should continue to ‘get away’ with it.
The problem is, now they want to buy, and they’ve done the ‘right thing’ by you, and now you want to keep on their good side too.
You can either be honest and say ‘sorry, don’t want to sell, if they move, you get tenants in, you can rent out your PPR for up to 6 years without paying capital gains when you eventually sell, and you start declaring the rent.
You can sell, be happy you got away with not declaring the income from something that wasn’t really your PPR…and you get a Capital gains free profit too, and you invest elsewhere.
I wouldn’t do wraps etc – they don’t need to borrow from you, why would they, any bank would take them on in the current climate, you’ll jusst end up pissing them off and you risk it ending in tears.
If it was me, and it was cash flow positive, I would like to hang on to it. So they move in, you’ve both had mutual benefit. So you get new tenants who you can’t do the ‘ppr’ deal with, and you have to declare the rent.
Or you do a ‘swifty’ like my dad’s wife does – you advertise in the ‘share accom’ for ‘half house to share’. You keep a room. (the smallest, or the store room, whatever suits you). YOu tell anyone who answers your ad to come and have a look. You suss them out. You say you’re out of town a lot and want someone to look after your place…if you get the right person, they are happy – they really get a ‘whole’ house for a cheaper price. You get to keep your PPR status and undeclared income.
My dad’s wife does ‘share accom’ on 4 houses – can you believe it – she is a big cheat – but, she is a rich big cheat.
She keeps a room in each one, and rents them all out, and doesn’t declare ANY income. Of course, she doesn’t get too close to anyone. None of the tenants know she has more than one house, just that she stays with her husband at the coast/in Bribane (depending on which house she is in) a lot – now I don’t think you are in her category, but hey, she gets away with it…
Just a thought.
I would like to have the guts to do this, but I don’t. Others do. It might suit you, it might not.
I can understand you wanting to keep at least ONE of your houses as your PPR.
Cheers, kooringal
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Any and all suggestions welcome.Long term renter over 10Y decides would like to buy property they rent from me. The property is +ve cash flow.
Value 190K approx, Equity 180K approx. Renter wants to put about 70K deposit and borrow the rest. The banks have offered renter 120-130K at 6.5% over 15Y, due to their age, full details of loan offer unknown. The question is, what should I do (1) let them arrange their own finance and receive 190K from them (2) accept 70K and do vendor finance at what interest rate and for how many years (3) let them buy a different property and I find new renters (4) how to make this a win win situation as they have been excellent long term renters and I would like to see them looked after.
Thanks C
[/quote]Hi Michael and Kaye, Kooringal here. You were helpful when I asked you something about transferring a PPR into a trust to ‘lock in’ a capital gain before renting it out…well, I have a better idea. Instead of paying heaps of stamp duty on that plan, I have checked with the tax office and have a better option. WOuld you or any others let me know if you have any feedback on this plan.
When you move out of your PPR, you get a valuation. you can then rent it for however long you want, and when you eventually sell, the cost base is the ‘sale price’ minus the valuation price, not the original sale price…which means you have effectively ‘locked in’ the capital gain that occurred while the house was your PPR without having to sell it, or gift it to a trust (which costs heaps in stamp duty).
Could this suit for your situation?
Cheers, Kooringal.
quote:
Hello. We have two properties with mortgages in our own names. When transferring them to our trust, what will be the costs?I expect:
Property stamp duty and transfer fee based on independent valuation;
Mortgage duty and mortgage reistration fee;
Loan application fees, etc;Anything else?
Michael
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