[RodCMember@rodcJoin Date: 2002Post Count: 335]

August 20, 2003 - 10:01 pm

Well said AD,

Everyone has to find their own niche. And as you progress, you’ll probably find that that niche will grow and expand as knowledge and experience increases.

Rod.

[RodCMember@rodcJoin Date: 2002Post Count: 335]

August 20, 2003 - 9:40 pm

Hi Fizman,

You’ve been given some great options here. But it really comes down to you. Digest the information, decide which path to take, make a plan and stick to it.

Once you’ve managed to sort this out you’ll be in a much stronger position for future investments.

Only you can make it work.

Rod.

[RodCMember@rodcJoin Date: 2002Post Count: 335]

August 20, 2003 - 9:11 pm

I’m surprised they want any experience. Most of those that I’ve spoken to in the past haven’t had a clue.

Rod.

[RodCMember@rodcJoin Date: 2002Post Count: 335]

August 20, 2003 - 9:08 pm

crashy,

I don’t understand your figures, it appears you’ve given both the +ve and -ve properties the same growth figure. Doesn’t this defeat the purpose of the exercise?

Rod.

[RodCMember@rodcJoin Date: 2002Post Count: 335]

August 20, 2003 - 2:02 am

Crashy,

The depreciation would be only on the cost of the building (not including land value or chattels), so will be less than $6K per year.

Also now that there’s a 50% discount on the gain, there is no longer an adjustment for inflation.
Though I think in some circumstances you can choose to use either the inflation adjusted figure or take the 50%, but not both.

Rod.

[RodCMember@rodcJoin Date: 2002Post Count: 335]

August 19, 2003 - 9:46 pm

Lies, Damned Lies and Statistics.

I also lived in Melbourne at this time (still do).
We bought our first house in 1987. There’s no way there was an across the board drop of 20-30% – some isolated sectors maybe.

There was however a significant slowing of the market and a retreat from the peaks. This retreat was more in the order of 10 to 15%.

Rod.

[RodCMember@rodcJoin Date: 2002Post Count: 335]

August 19, 2003 - 9:31 pm

Take a loan against the equity in the -ve property. Then lend these funds to the trust.
The trust then uses this money for deposits for future purchases in the trusts name. The trust then makes the loan repayments so that the interest is a tax dedution to the trust – not the individual.

Rod.

[RodCMember@rodcJoin Date: 2002Post Count: 335]

August 19, 2003 - 3:59 am

I’ll have a go at this.

I would expect this to be classed as a purchasing cost which is added to the capital cost base and therefore not deductable. If you paid for the buying agent with borrowed funds the interest on the borrowings would be deductable though.

Rod.

[RodCMember@rodcJoin Date: 2002Post Count: 335]

August 19, 2003 - 3:54 am

Talk to your accountant.

Having just re-read Stuart’s and House’s comments I suspect that I could well be wrong on this one.

Logic says that if you have to stop claiming interest if you move into an IP and make it your PPOR then it should work the other way too. I just had the impression that you couldn’t.

Then again when have the tax laws been logical[?]

Rod.

[RodCMember@rodcJoin Date: 2002Post Count: 335]

August 19, 2003 - 3:21 am

You’re best to talk to an accountant (I’m not one). But my impression is that as you are refinancing “personal” funds, not actually purchasing a new asset then it’s still not deductable.

One of the creative mortgage brokers on this forum may know a way around it though.

Rod.

[RodCMember@rodcJoin Date: 2002Post Count: 335]

August 19, 2003 - 3:13 am

Generally no, as the purpose of the loan wasn’t for purchase of an income producing asset.

Rod.

[RodCMember@rodcJoin Date: 2002Post Count: 335]

August 19, 2003 - 2:27 am

quote:

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Can I tell the bank that I will be renting out my PPOR (even though I do not intend to rent out) and living in IP1 ?

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doesn’t sound ethical to me.

quote:

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Will the bank accept that ?

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As a bank shareholder I hope not.

Rod.

[RodCMember@rodcJoin Date: 2002Post Count: 335]

August 19, 2003 - 2:24 am

I agree with doogs, it’s best to keep it all seperate and traceable.

div43, I wouldn’t contemplate trying to claim more than was actually spent on the IP. You need to be able to show what the funds were used for.

Rod.

[RodCMember@rodcJoin Date: 2002Post Count: 335]

August 19, 2003 - 2:21 am

Well done Aussie,

but look at westan go! he seems to have got from 100 to 180 posts in about 3 days.

Rod

[RodCMember@rodcJoin Date: 2002Post Count: 335]

August 18, 2003 - 9:22 pm

It’s the purpose of the loan which determines whether or not the interest is deductible. In your case it sounds like you need to apportion which funds are related to investment and which to PPOR. Probably you can claim the $250K plus purchase costs related to the IP.

Rod.

[RodCMember@rodcJoin Date: 2002Post Count: 335]

August 18, 2003 - 5:21 am

Mini said:

quote:

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one of his love seminars

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Sounds like that would have been an interesting seminar[]

Rod.

[RodCMember@rodcJoin Date: 2002Post Count: 335]

August 15, 2003 - 5:35 am

Me too.

Rod.

[RodCMember@rodcJoin Date: 2002Post Count: 335]

August 15, 2003 - 5:32 am

quote:

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Eg. Buy a place for $190K sell 5 yrs later for $240K = CG of $50K. However, if you’re claiming $7K in depreciation each year you’ll be taxed CG of $50K PLUS (5yrs x $7K) = $85K.
The difference after the 50% discount is applied for not claiming is a tax of $12,500 compared to a tax of $21,250. At the end of the day $50K-$12,500(=$37,500) appears so much nicer than $50K-$21,250(=$28,750).

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Your figures are flawed, you’ve forgotten about the 5yrs x 7K you’ve already claimed. So you’ve actually received $50K-$21250+(0.5x5x$7K) = $46250.

This is because the depreciation claim is assessed at your marginal rate, whereas the CGT is assessed after a 50% discount.

Also I believe that it’s only the building allowance claim which is deducted from your capital base, not the fixtures & fittings claim.

Check with your accountant. (I’m not one).

Of course it’s also not an issue if you don’t sell.

Rod.

[RodCMember@rodcJoin Date: 2002Post Count: 335]

August 14, 2003 - 9:43 pm

I had Deppro do schedules for 2 QLD IP’s a couple of months ago. $440 per property. very good reports, better than others (from a different QS) I’ve had in the past.

Rod.

[RodCMember@rodcJoin Date: 2002Post Count: 335]

August 14, 2003 - 9:34 pm

Have a look at the Web Links tab on this site and also try a search on this forum for useful links.

Rod.