ATo are only concerned about deductibility of interest.
Transfer of cash generally doesn’t trigger tax.

You should consider the legal effects
– is it a gift or a loan?
– how is it documented?
– if a loan what is the interest rate?
– limitations act
– who the trustee is
– what happens if you lose control of the trust?
– what happens if you die?

Most lenders will treat guarantees the same as taking the loan itself for serviceability purposes so using a ‘trust’ will not help in this regard, but could hurt because any loss will not save you tax so negative gearing addbacks won’t help.

But careful structuring of a trust can also improve serviceability in other ways. I think I have written a…[Read more]

If you are not registered for GST you cannot add GST to goods or services

wow, what book did you read!??

What is the issue?

Transferring the property to a trust or declaring a trust over it will result in stamp duty and trigger a CGT event.

1. Not really because rental income would need to be paid if you didn’t live in it. very ball park figure though.

2. title will show legal ownership %. If this is to be varied due to some sort of agreement the terms of that agreement will need to be evidenced.

If you meet a condition of release you could possible access super.

You don’t mention if your mother has passed away or not.

1. You won’t need a deposit if you are inheriting your mothers share of the property. As a guide roughly 6 times your annual gross income will be the max you could borrow.

2. Has probate been granted? Who is the executor?

3. Yes, ask for the terms of the agreement and a work out of their…[Read more]

Could be a ruse to get you to lower the price.
You could either
a) reduce the price by $25k
b) stand firm
c) lend them the money, or
d) meet half way

You need to consider whether you could find another buyer for the same or more.

Forgot to add, these days brokers generally can’t even submit their own loans.

I became a broker because I wanted to get paid for my own loans. But these days it would cost you around $10k to $20k to become a broker plus the ongoing costs would probably make it not worth your while unless you wanted to start a business.

Well, the broker should give you reasons why you should do what they are suggesting and these reasons should be logical and backed up with reasons

e.g. why should you avoid cross collateralisation of securities? Because it gives the lender more power when things go wrong. This is because the lender will have 2 securities for 1 loan. Also it is…[Read more]

Are you saying you can’t trust any of the 5 or so brokers who have replied above?

11 Strategies for when you move out of the PPOR and keep it

There are several things that can be done to improve the tax situation of moving out of the main residence and into a new main residence while keeping the old main residence and renting it out. Often there will be large amounts of equity in the original property while the new property…[Read more]

No work arounds I’m afraid other than transferring title. I will post below an article I have written on this topic

I thought he was borrowing to buy a house to live in?

If he borrows for another investment property the interest could be deductible.

No the interest wouldn’t because the use of the funds is for private purposes. security for the loan doesn’t matter.

Sorry I read it the other way.

If can still and should be structured like I wrote but the interest on neither loan would be deductible.
The amount of deductible debt won’t change and would be limited to the interest on the $120k loan (at most).

borrow against your existing house at the same bank for the deposit and costs. Make sure this is done via a separate loan.

Then borrow 80% secured on the new property, ideally at a separate bank.

Result = 105% loan without cross collateralising securities giving maximum asset protection and deductibility of interest.

There are 2 aspects to consider
a) making the property your PPOR for land tax – which requires you to live in it for 6 months prior to the assessment date -30 Jun I think, so you would need to move in by 30 Dec and live there continuously

b) The absentee person test, probably won’t apply if you are living in the property for 6 months as that will…[Read more]

Well your early retirement has probably been derailed now

You need to look at the definition of ‘absentee’ in the land tax act and try to make sure you don’t meet this as your land tax bill will go through the roof.

Absentees are taxed like trusts. the threshold drops from $600,000 to $350,000, the rate is higher plus there is a surcharge on top…[Read more]

what states are the properties in? Hopefully not QLD!