And just because the valuation has come in short doesn't mean you can get out with the finance clause either. Has the finance been rejected?

Yes, the broker must be part of one of these groups selling properties – probably $40k commission build in.

You can't break the law just to get $20k.

Look up the FHOG Act and you will see the definition of "spouse" – which may be in another act such as the Acts Interpretation Act. Then see if you meet the definition. If you are not living together in a domestic relationship then you will probably not be spouses and would probably still qualify.

Matt_13 wrote:
Hi all,
My wife and I recently signed a contract to buy a house and land package using the equity we have in our house.
We were to change banks for our home loan then use a non bank lender for the investment loan.  As yet we have not signed any document with either the new bank or the non bank lender.

We received the mortgage…[Read more]

If the trust makes a taxable income after expenses then tax will be payable. Who pays depends on the terms of the deed and when the beneficiaries become 'presently entitled' to the income. This can occur before they actually receive the income. “Presently entitled” basically. means a right to demand immediate payment of the income.

If no one is…[Read more]

Ritchie,

You should seek some professional advice on that set up.

Perhaps it is a temporary thing until the sinking fund reaches a certain level.

jmsrachel wrote:

kat13 wrote:
We pulled out the equity on our house – 90K which got paid into cash into our offset account until we were ready to get something…but we are also using 30K for personal improvements which is maybe why it was done that way????

We are currently waiting on preapproval for the rest (not sure how much we can get -…[Read more]

slav wrote:
At the moment I am looking at starting a familly trust and buying properties for us to live in, but not sure which will be the best way. And will it be advisable to transfer the super into the trust and self manage it?

You need advice to set up the structure.

You cannot transfer your super into a trust unless you have met a…[Read more]

Yep

You have to look and see if the body corporate has the power to issue these contributions. If so then you have to pay.

You should only borrow to directly invest.

Best to use a LOC or put the funds back into the loan and then use redraw. Never park funds into a savings account. Don't even do this for 1 min so as to write a cheque.

Sorry, don't mean to alarm you but Its too late now. You have set it up all incorrectly and The ATO can deny the deductions. See the case Domjan.

You can't borrow money and put it into a savings account – well you can but the interest will not be deductible because it is not investing. Mixing it with cash makes it even worse as you can't trace…[Read more]

You will have have a look at the SIS Act and SIS regulations.

A requirement is that any borrowings must be limited recourse and the assets of the fund cannot be mortgaged. This means the new property has to go into a separate trust which then provides the vehicle for the borrowings and offers the property as security.

If this can be overcome…[Read more]

What was in the contract you signed? Did you see any strata searches or conduct any?

If they are paying $600 per week then their interest rate must be 8.74%. Are they fixed?

You should seek advice on using the LOC to pay for loan repayments. What is your purpose in doing this? ATO can apply Part IVA and deny your deductions.

For a development it would be a good idea to use a separate structure such as a discretionary trust with a corporate trustee (not beneficiary, but could be that too).

But the trouble with your…[Read more]

kat13 wrote:
PLC – Its sitting in my offset account at the moment, linked to my PPOR loan – hoping that's the best option.

Oh no!

You borrowed money and put it in a savings account? The interest will no longer be deductible and you have created a mixed purpose loan.

Trusts need to distribute income or the trustee will be taxed at the top rate. If your trust can only distribute to people on the top rate then there will be no tax savings.

But most discretionary trusts have the ability to distribute to a company as a beneficiary. So what you could do is set up a company and have the trustee distribute to that.…[Read more]

Yes, It workers and engineers love the old spreadsheets