Water penetration and cracking issues are very difficult to fix. If there are warping doors and cracked ceilings then this could mean bigger underlying problems. Fixing waterproofing issues can be extremely expensive, and you sometimes don't really know how much of a problem it is untill a contractor startes digging up planter boxes and removing…[Read more]

Yep agree with SNM. The only reason would be that it is too expensive. Every house in Australias capital cities will rent quickly if the price is right.Cheers,Luke

Your accountant will be able to help.Cheers,Luke

Hi,I have a copy that I am looking to sell. PM me if you are interested. I tried to PM you but you have your messages turned off so I couldn't.Cheers,Luke

My understanding is that you can do it, but only under certain circumstances.For example, you could be the bookeeper for your husband, so he pays you an hourly rate to arrange invoices, do the banking, and other miscellaneous items. However you must be paid at a market rate and for a reasonable amount of hours worked. So I don't think that it is…[Read more]

No it is not legit- it is your partners income, not yours. If you read the ATO website, you will see that they consider this arrangement tax avoidance and will prosecute people who do it.Maybe in the past it was possible, but not now.Cheers,Luke

Yep I agree with the above comments. A $400k unit in the inner west (Dulwich Hill, Ashfield, Marrickville) would be a way better buy IMO.One other thing to consider is that you mentioned that there are a lot of apartment buildings being built or just having been completed in Liverpool at the moment. This means that there is no shortage of…[Read more]

Yep, sounds like he is trying to screw you over. Bear in mind that because you have already used your FHOG, getting into a new property will also cost you stamp duty. So I think that if he wants to buy you out, you should get a valuation done to determine how much equity is in the property (make sure you are happ with the valuation and it diesnt…[Read more]

The term the ATO uses for this is 'alienation of personal services income' if you would like to search for it o the ATO website.Luke

This is a tax avoidance scheme and is illegal. The ATO is cracking down on exactly this type of tax fraud and so I would definitely not do it.Cheers,Luke

From what I understand, you can not get a retrospective valuation done. The home will be CGT exempt for the time you lived in it as your PPOR. You will have to do the calcs yourself as your post doesnt really make sense (you said you purchase the property in November 2009, lived in it for 14 months and then rented it out on January 2010).If your…[Read more]

I think you should consider the ownership structure for the new IP, as purchasing it in a trust gives you the opportunity to distribute income to different people to reduce your tax liability.Cheers,Luke

As the building industry is a major part of the economy and provides thousands of jobs, any decision that would adversely impact this industry would be very unpopular. Given the construction unions relationship with Labor, I doubt this will happen under the current government, and also doubt this will hapen under a Liberal government. Also with…[Read more]

You could buy the property in a unit trust, as this offers more flexibility. In the future if you wish to change the percentage of ownership in the land, you could gradually redeem units or transfer units. You would be up for CGT on the sale of the units, but you could do this over time (say 5-10% per year) in order to minimise the amount of tax…[Read more]

Hi CB,Have you thought of renting a house in the area you currently live and renting out your PPOR? Generally, yields in prime locations are low and so it is cheaper to rent in these areas than to buy in terms of cash flow. You can rent out your current PPOR for up to 6 years I think without losing the CGT exemption, while still enjoying negative…[Read more]

If you are getting a builder to build it for you, then $80k for a decent quality 60m2 unit is not a bad- it works out to about $1300 per square metre which is a reasonable price I think. Obviously if you are going to build it yourself then you will save a bit of money.Cheers,Luke

$22k for a small granny flat on a slab (so no floor frame included) is an ok price. I have had quotes for $32k for a 60m2 two bedroom one on stumps (so it includes a floor frame).Cheers,Luke

Hi Guys,I am getting one built at the moment. Total costs will be about $85k, although admittedly my site has a bit of a slope so there is a bit of earthworks. The unit is a 2 bedroom unit and 60 square metres in size and is of good quality, and I am getting a builder to build it (not doing any work myself apart from minor landscaping).I would be…[Read more]

You can only negatively gear in hybrid or unit trusts, not discretionary trusts. Hybrid trusts are a strange animal, so you need to talk to someone who relly knows what they are doing. The ATO is cracking down on hybrid trusts so I did not go down that route when I set up a trust.If you are using a discretionary trust, you do not 'own' the trust…[Read more]

Without a doubt you need to go to a good tax lawyer to get the deed drawn up. It will cost you a little more than getting one off the shelf from the corner store, but a trust is a 80 year investment vehicle so surely it is worth spending a little money getting it right.Luke.