You need a larger deposit on most inner city units and especially inner city serviced apartments because the lenders do not consider these as good security to borrow at high levels against. I would take this as a warning and listen to it. A suburban unit can usually provide you with much higher borrowing levels.

The Mortgage…[Read more]

I meant the ‘living off equity’ thing.

Regarding the pre-paying tax (or anything for that matter), I am a firm believer of paying everything as late as possible. Money is more valuable in my hands than someone elses regardless of the deductibility. I like to make more money and pay more tax first and then work out how I will pay less tax…[Read more]

I use a corporate trustee as it seperates the entities and offers an additional level of asset protection.

The Mortgage Adviser

http://www.themortgageadviser.com.au

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Are you suggesting a covered call is useless (“stinking”) Wayne?

The Mortgage Adviser

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Vic, it is clear from your post that used equity short-term and much of it for investment, albeit we do not know how much.

Why don’t you confirm it for us now?

Regardless of your response, I have come to the final conclusion, supported by advocates of this strategy (excluding Terry), that ‘living off equity’ is very restrictive in its use and…[Read more]

Fully deductible as an investment property since rented out but no capital gains tax for 6 years or until you get a new PPOR.

The Mortgage Adviser

http://www.themortgageadviser.com.au

Essential Links Website

They are not allowed to give official advice without doing the plan.

Why don’t you tell people here what advice you need and you might get some exce3llent responses for a good price – FREE!

The Mortgage Adviser

http://www.themortgageadviser.com.au

Essential Links Website

Luci, that is a huge reason why I think that people who plan their investments around tax deductions as opposed to making more money are crazy!!!

The Mortgage Adviser

http://www.themortgageadviser.com.au

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Originally posted by 65ens:
Im paying extra on the loan as well as putting all savings into this account.

I strongly suggest not paying extra off the loan if you might convert it to an investment property in the future. Just pay interest only and leave the rest sitting in the offset. It does the same thing. Just don’t spend it on rubbish!!!

Im…[Read more]

I think this link will be of great assistance to you. I was very impressed:

http://www.housing.wa.gov.au/key/access.htm

Please let us know how you get on.

The Mortgage Adviser

http://www.themortgageadviser.com.au

Essential Links Website

Contact Richard with the username Qlds007 in this forum. He is a Cane Toad!

The Mortgage Adviser

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I don’t think there is any point to obtaining tax deductions on a pension as there is no tax to deduct.

Regarding planning this strategy out, I don’t know of any lenders who will lend money to someone without an income (other than just a pension) so I don’t see the point if your plan does not include obtaining income from working or starting your…[Read more]

Terry, instead of telling everyone they can do it and saying that it could be a problem if done incorrectly, why not just tell everyone how they can do it correctly.

Surely one of the many accountants on this site can assist here.

The Mortgage Adviser

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Terry, the $200,000 for the couple was not my example. It was the $100,000 per annum for a single individual.

Regarding you brainwave about using the money to pay for expenses and then living off rent, that is NOT ‘living off equity’. It is common practice to borrow to pay expenses and then deduct the interest on this expenditure and it is the…[Read more]

It certainly helps reinforce my strong stance on the illegality of deducting capitalised interest in this manner.

Thank you for sharing.

The Mortgage Adviser

http://www.themortgageadviser.com.au

Essential Links Website

I would focus my attention on ways of generating income before looking to buy property while on a disability pension. There are numerous opportunities to make money through the interent for example. You would definately need to at least secure a deposit of 20% plus any fees unless you are entitle to the first home owner benefits and you are going…[Read more]

I have set up my own structures like this in the past using a company. It worked well for me but I believe using a trust is better when considering deductibility and asset protection.

I was leaning towards the trust setup but have since decided to pull out of nearly all direct property investment and invest indirectly.

The Mortgage…[Read more]

Terry, instead of continually directing people to do what is potentially incorrect or illegal and may result in great expense down the track, why don’t you ring your ‘tax adviser’ and get some more formal information about this.

If the cost is a problem, tell me his details and I will arrange it. My advisers tell me deducting capitalised interest…[Read more]

Thanks guys.

Richard, the reason behind the creation of the site was for that exact reason. I was amazed that a central point for downloads did not exist. I put one in my other website’s secure area but thought everyone else could use it as well. The trick is now to keep it up to date so it always remains useful. This should not be too much of a…[Read more]

There is another much more simple way. You buy the property in the name of a different entity – eg: company or trust – and rent the property from the entity at market rent.

This is fully deductible!

Funds raised from yourself can be lent to the structure you use and you could possibly charge a higher interest adding further to the deductions.

I…[Read more]