Forum Replies Created
You can borrow PI or IO for most puposes, it doesn't need to be for investment.
Benefits – lower repayment on IO (based on the same amount borrowed as you are not contributing to the repayment of capital) Disadvantages – you will need to refinance for the same amount at the expiry of the loan/no reduction in the balance owed. Asset value may not increase so your borrowing capacity may decrease, if you borrow for non-investment purposes the cost of loan would most likely be non-tax deductible.
Thx Elkam, rang the OSR this morning, PITA……They will only deal with the owner of the land (a bit hard if you are investigating). However, they levy landtax on the owner as at 31.12.XX ie the vendor. As the vendor has paid/still to pay then the vendor is passing on the cost to ourselves. I now have to negotiate down from this position – based on a single holding it should be nil.
Put the 149 back on the owner to produce, after all he is selling it (and your solicitor would requisition one from them during the cooling off period anyway).
Well, start recreating your diary:
Date/Time Taxi to airport incl invoicesDate/Time Flight No. including invoices
Date/Time Hire Car Pick-up incl booking slip & numberDate/Time Arrive Accommodation
Date/Time Drive to unit
Date/Time Inspect Premises
Date/Time Phone Calls to tradies
Date/Time Visit to Trade suppliers
Date/Time Visit to CouncilDate/Time Back to Airport
Date/Time Pay Hire Car
Date/Time Flight No. etc
Date/Time Taxi homeContact the Australian Property Institute – they are the controlling body for all valuers and their listing should show any areas of expertise.
If you sell in 08/09 then you pay in 09/10 (after you lodge your return). If the contract is dated before 1 july 08, you will pay this year.
CGT is levied on the total capital gain so from when you purchased until date of sale contracts, so yes if you sell in 09 you will pay for 2007-2009.
Principal Place of Residence ie the house that you live in and claim an exemption from CGT
Ultimately you will have to report the CGT and pay the tax when you get your tax assessment from the ATO, until that time you can do whatever you like with the money as long as you can access funds to pay the tax when it falls due.
A couple that you might grill:
http://www.abbotttout.com.au/driver.asp (seems to be a more commercially minded legal firm/multi-site/states)
http://www.conveyancingavenue.com.au/ (conveyancer)Firstly, the conventional way that you can avoid paying CGT is to have it as your PPOR – a bit hard when it is land only. If the date between signing the contract of sale to the next contract of sale is less than 12 months, then there is no discount for any capital gain – you might have to wait until September if you want to get a discount on the tax payable.
You can invest the CG as you like until you submit and recieve your 2007/8 tax return at which point you will have to pay.
Just out of interest, what do you mean by 'title was not cleared'? Is it a new subdivision awaiting land titles office issuing new title documents on the land or adverse possession under OST?
As a last point, you can avoid paying CGT on this purchase, go out and buy $20k of dud shares, sell them at a loss and carry the loss forward until you can offset it against the capital gain. (Not a good strategy unless you need to offload the shares eg if you bought Centro/Allco etc at their peak).
Consider using a local solicitor who deals mainly in the area eg someone based in Kellyville/Castle Hill/Norwest as they will know the area fairly well and be well acquainted with any proposals that may be under consideration. You may raise the question with them to confirm how active they are in the area that you are buying and if there is anything that needs consideration.
Most will review your contract of sale document prior to you making an offer as part of their service – this will simplify things and give you additional information to query.
It is always interesting to see what banks etc have predicted and to review these 6-12 months later to see how accurate they may have been. If any of the banks had predicted the rise in rates (even reading into the underlying inflation rate) they would have looked like they were profiteering if they foresaw official rates rising to 6.75% (more money for the banks/who would go to the bank offering the gloomiest interest rates etc?). Notwithstanding that, none of the banks, even in their wildest dreams, had factored in a crash in the sub-primes in the US and how that would have global implications (even though they were selling derivatives which were originating in the US).
There should be a 149 certificate attached to the contract of sale (short form should be sufficient – as this shows all of the planning instruments & zoning) – your solicitor will requisition a full S149 from the vendor upon exchange.
Take a copy of the S149 down to the council town planner and get them to explain away any 'nasties' or queries.
It may be worth contacting Railcorp http://www.railcorp.nsw.gov.au if the block is near the new underground rail line or visit http://www.tidc.nsw.gov.au/ for any new/planned lines (there is a map of the Chatswood/Epping line running thru Marsfield on one of the links).
If you need to contact the secretary of the body corporate or speak to some of the residents – they may be able to let on if there are any issues in the block
AFAIK it isn't in the BCA – may be that someone is having you on.
I'm with you Terry – only question is Kiz – how do you take possession for the refurbishment works without 'owning' ie are you renting or have negotiated a longer settlement period with access?
Cost comparison – roughly 60% +/- of brick. Your main savings are the difference in the cost of cladding/framing vs brickwork as essentially you cannot do away with the slab (although it is of a slightly lighter design) and the roofing (unless you have a tiled roof – more expensive again).
Colorbond dents when hit vs brickwork which dents your car.
(PS: I thought you said in your earlier posts that you were a builder – don't you have access to a cost guide?)
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I'd agree with Terry, if you can get an LOC and use it for the purchase or alternatively (many will shoot me down in flames), use the IP as security and the PPOR to top up that security up if necessary and have the loan against the IP (with an offset etc) – then there would be a no questions asked approach as the money borrowed can be directly related to the purpose (the IP). There may be some cross-colateralisation issues (ie one being used to secure the other & cross claims against either property) however if you consider your mix of loan/security/& income from the IP there should minimal risk placed on your PPOR.
Terry/Richard, if the land is for a PPOR and you borrow against the current house to fund purchase/construction then relocate to the new PPOR, will the interest on the loan on the old PPOR (now an IP) be claimable or is it better to sell the old PPOR and have buy a new IP (esp if there are CGT implicatations in selling the old PPOR)?
