Hi polsis,

Others on this forum might be more helpful, but is this owned as a tenants in common type where you have 50% each? If so, I cannot understand why the accountant has advised for your dad to list all the losses, as they should be divided equally between the both of you. Likewise when you sell it, any CGT profits are proportioned…[Read more]

With the way the Australian tax system works on self-assessment, there is nothing really stopping them from claiming even if fraudulent. However if they are audited by the ATO and found to be falsely claiming interest, there would be at the very least extra tax to pay for all corresponding years that they were claiming, interest charges for…[Read more]

Ailime, basically once the principal has been paid off whether through normal P&I repayments or extra repayments into a redraw, you have lost the ability to use it for deductibility purposes. You cannot "gain" it back (unless it is taken out for investment purposes). Hence why in my opinion an offset account should always be used instead of…[Read more]

That is correct as the $160K or so in the sub loan would only be deductible for the first two years, while the same amount would be deductible after that for as long as you then held onto the property as an investment.

There is the other option similar to what Richard mentioned but in addition you could take out equity against you current…[Read more]

As Jamie mentioned, you're most likely going to be charged some type of variation fee for the change, and any accrued amount of interest that hasn't been paid would be added to the loan amount at the time the loan documents were done in the first circumstance.

Cheers

Tom

Theres nothing stopping you trying to restructure from a P&I loan to IO. Most likely you will need to provide updated financials to the lender.

If you have a $300K interest only loan, and you have $300K in an offset, then your monthly repayment reduces to zero.

Cheers

Tom

Similar to Jamie's suggestion above but if borrowing capacity doesn't allow, there is the option of a relocation loan based on end debt and interest capitalisation. Gives you time to sell your current property, the caveat being that if you don't sell within the prescribed time, you are required to start repayments on the total…[Read more]

You need to get seek professional assistance on this, but from memory if your sole intention is to use the land to build property to rent out, then the loan interest is deductible even if nothing has been constructed yet.

Think there was some tax ruling on it years back.

Cheers

Tom

Not necessarily. Have had an investment in Broadmeadows (Jacana) for 13 years now, and in that time only had two different tenants in there and no real issues from them.

The area and surrounding suburbs had some nice growth 3-5 years ago, but that halted much like the rest of Melbourne.

Cheers

Tom

Do you have any outstanding loan against you current PPOR? If so, then the $15K should be used against that in some fashion. Always ideal to pay off you non-deductible debt first.

Cheers

Tom

I think I understand what you were attempting to do with regards to the $150K. You were thinking that your partner could buy half the apartment property at $150K and take out a loan for it, with the fund proceeds being used for the deposit on the new property.

Unfortunately it doesn't work like that. If she did take out a loan for $150K, with an…[Read more]

Opee, like Jamie mentioned, bank valuations are normally done by independent valuers on the lenders panel. The purpose of it is to come up with a value the lender could foreseeably be able to receive if it had to call in the loan. How accurate are they? As you see with the different valuations, there is a big difference between the two you have…[Read more]

Not too sure about other states but in Victoria, the rates notice shows Site Value which is the land value, and the Capital Improved Value which is the land plus building. How close these values are to actual valuations that lenders would come up with is very debatable.

Cheers

Tom

Freckle wrote:
Wilko while I understand your angst I don't think the price is too far off the mark.

Labour rate is actually pretty reasonable. Charge out rates for tradies have been around $90/hr for the last 10 years or more. Plumbers are the most expensive trade next to sparkies. The hours worked are about right. I notice there's no machine…[Read more]

As others have mentioned, it will be very difficult to place a deal at 90% with an unpaid debt. At a much lower LVR it starts becoming possible, but even despite this, the interest rate is high.

Best option is to repay the debt. This makes it appear that you are willing to pay off your debts and makes the lender much more prone to lending you…[Read more]

Are you intending to build and sell without renting? If so, then it might be regarded as a profit making venture with the profit treated as income. Also GST issues to consider.

Cheers

Tom

Also when its time to sell, sales agent commissions, legals, etc associated with selling can be added to the cost base.

Cheers

Tom

Just be aware that when doing the numbers, you need to add in the other expenses like management fees, rates, insurance, etc to come up with a more accurate out of pocket cost.

As for the offer, yes you can put in an offer with having any approvals in place, however if accepted you should have the usual subject to finance and pest and building…[Read more]

Hi Richard,

You might be incorrect there. I think if you are divorced/separated and haven't had an ownership interest in residential property before (i.e. spouse owned outright) then you might still be eligible for FHOG.

Either way I suggest that Jasmeet contacts her relevant State Revenue Office and asks them about her scenario.

Cheers

Tom

Unless I'm misreading it, I daresay the bank would know about it otherwise the land currently wouldn't have it's own separate title.

Cheers

Tom