If they are paying anymore than their share of food and ulities then it is rent and declarable. You will also partially lose the CGT free exemption.

Yes, looks like the parents are locked into the contract now.

Freckle wrote:
PS:

Terry might be able to confirm this but I believe that as long as you're paying something towards settling an account on a regular basis they can't have a judgment awarded against you.

Don’t think this is the case. If you breach an agreement someone can take you to court and if you lose a judgment will be issued against. If…[Read more]

First place to start would be to get a copy of Trust Magic book by Dale Gatherum Goss. An easy to understand introduction to trusts aim at the property investor.

It could be there was a contract in place.

I would suggest you write to the company and dispute the bill and state you had an agreement for $4500 to $5000. Be nice about it and see what they say.

If you get a nasty reply then reassess.

Well, oral contracts can be binding. But was it a fixed price agreement? What were the other terms? Was it even an agreement?

gmh454 wrote:
Richard you seemed to indicate that a 80% loan through a fund is available. Could you tell us which lender goes this high with a SMSF. Thought they stuck to around 66%.

That is how Richard makes his money, knowing what to put where. It is intellectual property built up over many years of hard work. Why not use Richard to do the…[Read more]

dangermouse99 wrote:
Hi TerryW and Richard
My friend wants to buy and live in the front house, $400K is all he can afford so he can help me by putting dollars in while I develop the 2x Townhouses at the back. Do u mean to divide the land into 3 as there is 2 Townhouses behind the main front house? This is a new equation for me so just try to get…[Read more]

Main residences are generally exempt. But not always. eg>
If you run a buinsess from the home,
If the land area is over 2 hectares
If you are in the business of buying and renovating.

If it is a normal size block with one house and no renters or business conducted at home then it would probably be exempt and you would probably be able to argue…[Read more]

That must have been great. You should have trademarked the name maybe!

Qlds007 wrote:
Amazing what advice some so called experts provide.

Met up with a couple of forum clients earlier today in Melbourne and amazed what advice their existing Financial Planner has given them on what they can and cannot do with their SMSF.

Nothing amazes me in the current climate.

In saying this dying is a radical way of getting…[Read more]

Jamie M wrote:

Terryw wrote:
Furthermore you will lose the CGT exemption status.

Which is a massive thing to lose!

Imagine owning your PPOR for a couple of decades under the wrong structure – then selling it to find out that you have to pay a nice chunk of CGT. 

Cheers

Jamie

I had a client once who owned their PPOR in a company. There…[Read more]

I had a client that optioned up about 20 blocks of land off the plan. They tripled in value before settlement. He was a millionaire out of that deal. I’ve also had other deals where I have sold an option and it hasn’t been exercised.

Are you willing to lose the option amount?

Transferring your main residence to a trust will create several problems and won't assist in increasing borrowing capacity.

You will pay stamp duty, possibly land tax and receive little in the way of asset protection. Furthermore you will lose the CGT exemption status.

IF YOUr friend is going to be living in the front house then a trust may not be suitable.

Maybe tenants in common might be better. Your share in your trust and his share in his name. Draw up a deed of partition and then settle. later divide the land into 2 with 1 block owned 100% by each of you. Possibly no stamp duty on the split.

Terryw wrote:

Grreg wrote:
Terry – I think you have nailed it. We do NOT want to use our SMSF to borrow. The SMSF is just contributing funds. I think I might not have been clear enough about that in my initial post.

The plan would be that the SMSF simply contributes cash to the deal (through buying units in the unit trust). We would…[Read more]

Grreg wrote:
Terry – I think you have nailed it. We do NOT want to use our SMSF to borrow. The SMSF is just contributing funds. I think I might not have been clear enough about that in my initial post.

The plan would be that the SMSF simply contributes cash to the deal (through buying units in the unit trust). We would personally borrow from…[Read more]

ChrisA1 wrote:
Appreciate your comment here Terry.

Could you please explain about reborrowing by setting up a new loan.

I am aware that once I take the money out of the offset, the home loan increases. I took this as a cost of starting the IP journey until the IPs started revaluing. However thanks for the information that this money wouldn't…[Read more]

ChrisA1 wrote:
Hi Terry

Just wondering about the other way. I am holding money in my PPOR offset account, which is currently reducing my PPOR loan until I use it down the track as a deposit for further IPs/investments. Since this money is in my PPOR offset, I assume it is simply called 'savings' and can be used as I like

It will not be a good…[Read more]

I would only pay down the loan if you have a main residence fully paid off. Otherwise you will be losing tax.

And then if you have have a main residence paid off I would still rather use a 100% offset to store the cash as this will save you the same amount of interest but make the cash available for non investment purposes without affecting the…[Read more]