Forum Replies Created
Apologes Mike i thought your father owned both sides of the duplex.
No there will not be any CGT implications if the property is his owned as his PPOR and your friend will qualify for both the FHOG and the Stamp duty exemption based on the fact he intends to occupy the property.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Michael
The transfer of ownership would be considered a sale of the asset so Stamp Duty would be triggered (course certain exemptions may apply) and possibly CGT for his father.
As long as he would qualifies for the FHOG then there is no issue in him purchasing from a related party however the security worries me as a Duplex implies 2 properties side by side one of which he has rented out. This would not satisfy the FHOG requirements.
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Yours in Finance
Richard Taylor | Australia's leading private lender
Which State is the property in?
The amount of duty will vary and maybe favourable in certain States.
Certainly worth doing the numbers.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
No dramas feel free to shoot me an email with the numbers and i will try and make some suggestions.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
I must admit i read your post a couple of times and got slightly confused with your numbers but in essence Yes you should be paying the minimum payment on your investment property and putting the additional funds into the PPOR.
Unfortunately not enough hard data to make a suitable recommentation but i am sure there are a couple of ways you could save a decent amount of monthly interest and move forward.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi L
Yes doesnt matter who the Vendor is SD is payable at the applicable rate.
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Yours in Finance
Richard Taylor | Australia's leading private lender
Trouble is whilst you would still get the FHOG 2nd time round you wont in Qld get the concessionary Stamp Duty and that is a decent sized saving.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Dave
Yes it can be done and if you want to read my API magazine article you will see how i did it.
In saying this you need to bear in mind that in the current climate it is going to take time and you are going to need an income to support the borrowings both for the existing borrowings and also going forward.
Certainly once you have built up either a rental income or consistant profits through your developing lenders will take this into consideration but you are going to realistically need 2 Year Tax Returns and track record.
With your healthy PAYG income why not start small building up a portfolio either in your wifes name or DFT name and then slowly acquire income producing Assets to enable you to move forward.
Loan structure is important to enable you to have consistant access to future borrowings but no reason why this cant be set up.
Hope this helps and good luck.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Yes the question of deductability is based around the "purpose test" and not the security offered.
As i have mentioned before you could have the loan secured against a pogo stick and use the funds for investment and the interest charged would be deductible.
Admitedly i havent done a pogo stick loan for a while.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
As Jamie said remember the discounted Stamp Duty rate on a 300K purchase and the FHOG could amount to a savings of around $15,000 on Settlement.
Once you have satisfied the State requirements for both you can move out and make the property an IP.
Going to take you a swag of rental income to get $15K ahead.
Structured correctly this saving could be the deposit on the next property.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Lee
Dont hardly do a deal these days as very limit market place but usually over 3-4 years and residual will depend on what the machinery is.
Not a great answer but not much to go on.
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Yours in Finance
Richard Taylor | Australia's leading private lender
Sorry Mike Yes good point.
I was assuming he was a mere whim of a lad.
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Yours in Finance
Richard Taylor | Australia's leading private lender
Other issue Michael is most Company PIBS have limited security (Usually ranking below A Class and Preference shareholders) so tend to trade at a higher rate of return than AAA Govt Bonds.
Currently for say the 6.25% coupon maturing Apr 2015 you are paying around 108.50 so well over par value.
Only reason i now was looking at the increase in Bond prices yesterday post the RBA interest rate announcement.
Of course you could always look at Italian Bond prices. They certainly had a nice rally over night lol.
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Yours in Finance
Richard Taylor | Australia's leading private lender
HI YI
Both financed a few and also own one myself here in Brissie.
Certainly you can use equity in IP's as collateral security but you should still be able to borrow against the value of the rent roll.
Havent done one for 6 months or so but you are still able to get circa 50-60% of the value of the roll.Going to depend on the business valuation and must admit i dont know who those rent roll lenders use in Adelaide.
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Yours in Finance
Richard Taylor | Australia's leading private lender
I agree with Mike in relation to the transfer of the property from the Bare Trust to the SMSF however feel that the Steve is asking whether the property can be transferred to himself personally which of course breaches SIS.
In relation to the Development as long as the SMSF is not seen as running a business i wouldnt have a problem.
A few years ago I purchased a block of 4 units in my SMSF, strata titled and renovated them and sold 2 off.Again didnt do the work myself although engaged relevant Professionals to complete the project.
Had no issue come Annual audit time.
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Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Johann
Government Bonds are certainly not a new investment.
Your question is a wee bit opened ended.
Do you want to narrow down a little more to what you need to know.
I am assuming you understand what a Bond is and the mechanics behind them.
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Yours in Finance
Richard Taylor | Australia's leading private lender
And Maree was happy i think lol
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Yours in Finance
Richard Taylor | Australia's leading private lender
Ok assuming the credit defaults have dropped off your credit file and not just showing as paid then you should be fine.
Question you would ask yourself is as the loan is going to be mortgage insured anyway is it worth paying the extra LMI and having a separate loan and rolling in the Personal Loan to the home loan saving you significantly in Annual interest.
If as you have stated the interest is not deductible i think i would be working out the numbers first.
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Yours in Finance
Richard Taylor | Australia's leading private lender
Sporty
Try my Accountant who is an excellent bloke, specialist on property structures and also a forum member.
Steve Hodgkinson who is a partner at the Gold Group in Southport
GOLD GROUP CONSULTING
56 Davenport Street
(Cnr Davenport & Bay Sts)
SOUTHPORT QLD 4215Phone: (07) 5532 2855
Fax: (07) 5532 4563
Email: [email protected]
Tell him i sent you down and he will look after you. Most good property Accountants arent taking on new clients so at least my name usually gets you past the receptionist lol.
Have recommended hundreds of forum members to Steve and all seem very very satisfied with his advice.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Brad
Reason for my hesitation is you would hate to find that you cant get the construction loan off the ground because of a failed credit score basis due to the fact you had recently applied for a personal loan.
Would need to know all the numbers first before i could give you a clearer path.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
