I would also suggest a IO loan with offset. Best to avoid a LOC – these should only be used to access equity.

It may also be best to avoid paying a 20% deposit as this will mean less cash for your non deductible PPOR loan down the track.

You could borrow 20% off family, then wait for capital growth and pay them back by borrowing against the…[Read more]

b.a.1989 wrote:
He doesn’t get any rebate.
The propery business uses a call option on the contract so they deal with all the paper work, he just signs and provides pay slips so there might be a rebate but he doesn’t see it.

The interesting part is my uncle’s solicitor said it’s legal and very smart???

That is interesting because the law…[Read more]

What do you mean by 'equitable access'?

b.a.1989 wrote:
just an update.

I’ve found out that price on the contract is actualy $510k and not
$420k but his bank loan amount is $420k.
He said the bank has valued the property at $510k but he doesn’t know how the discounted amount was used for the deposit. He doesn’t care as long as he only owes $420k, gets the property without paying and…[Read more]

Firstly just because you call them contractors doesn't necessarily mean they are contractors. You need to get some legal advice on this and then conisder how you are going to contract with them. Terms of the contract and contracting entity etc.Contract or employment agreement with each

Cash basis or accruals? It is generally when you get paid, but not always.

Freckle wrote:
ROFL….

Japan’s Vacant And Abandoned Houses: Visions of Detroit 

The Ministry of Internal Affairs and Communications surveys vacant houses every five years, splitting them into two categories: houses that could be rented, sold, or used as secondary houses; and abandoned houses. Over the fifteen years from 1993 to 2008,…[Read more]

New residential property is subject to GST. New includes property constructed or substantially renovated in the past 5 years.

Setting up a discretionary trust is only a small part of an asset protection strategy.

you have family members on different incomes then there are a few strategies you could use to save tax.

You would find cgt calculated at market value. Loans are irrelevant for cgt.

You will generally be taxed on your percentage ownership unless there is some other trust in place.

If only you had used a unit trust

What is the purpose in wanting to do this and is the other party a trust or an individual?

Ailime wrote:
Hi all

My sister & BIL are thinking of upgrading their current PPOR (let's call this PPOR 1 and its corresponding home loan as Loan 1).
They were suggested by friends (who have done and are doing it) and their accountant to do the following:
– Turn PPOR 1 into IP by renting it out.
– Redraw the equity from PPOR 1 and use the money…[Read more]

Oh, maybe it is your trust as tenants in common with another person or trustee?

There could be several methods to structure this. One I like is using a discretionary trust. Money can be gifted and borrowed back. Later this loan could be refinanced and 100% deductibility could be maintained if done correctly. In addition tax and asset protection advantages would be possible.

Also make sure you obtain the permission of your…[Read more]

When you say a 50% share, do you mean there are units issued? Or are you talking generally? because beneficiaries cannot have shares in a discretionray trust – otherwise it would not be discretionary.

If the trust is a unit trust this opens up a range of opportunites for you.

god_of_money wrote:
Hi Terry

are u talking about purchasing property under DFT and can be transferred to SMSF in the future without stamp duty?

Very interesting concept

Hi GOM,

Nope, if you buy under a discretionary trust it would be impossible to transfer to a related SMSF.

But if you were to set it up under a unit trust then it is…[Read more]

No you have a right to ask. I was just curious because you said you couldn't afford it!

I am a Sydney based solicitor (CBD). What sort of legal advice do you need?