Actually I think it should be 1/11th of the sale price.You will be able to claim GST on items purchased for the development though. Did you pay GST on the purchase?

There are ways to set up the loans so that your first home is not used as security for the second.But, if things go wrong then your current home can still be at risk indirectly. Hopefully this won't happen though

Sale price x 10%??

I am only gessing about the stamp duty, you would have to ask your lawyer or look at the duties act SA to much sure.CGT may not be much if you only rented it out 6 months. It may not be anything depodning on the other costs and value.

Hi MandySorry to hear about your husband's cancer.What you are proposing won't really work although it may be possible in theory.For it to work you will need to find someone with $220,000 in cash wanting to buy half a property – what is in it for them? They will be up for stamp duty and will expect an income return as well. If you were to sell a…[Read more]

Stamp duty would be market rates on the value of the property transferred

probably stamp duty and cgt

Never!I have an evil iphone and can post from that ok – its just too small. When my plan runs out I will be going for the Samsung Note.

Solomon10 wrote:
Yes, i know it sounds pessimistic but i always look for the worst outcome before what is the best outcome. More profit won't hurt, but less profit or no profit at all will definitely hurt the bottom line.

This is not pessimistic but smart. There are several 'what ifs' that you should ask yourself before any investment.Besides…[Read more]

Refinancing won't change the purpose as long as no additonal borrowings for private stuff

Then it probably will be deductible – or the interest on this $130k – when the property is available for rent.The loan balance didn't drop below this level at any stage did it?

Was the $130,000 used to purchase the house?Changing the loan type won't affect deductibility.

Free advice is very costly!

No, you cannot repay yourself. I forget the name now, but there is a tax principle that you cannot borrow from yourself.You should have borrowed the money from someone else temporarily. This is why it is a good idea to set up a trust to hold your cash so that you can borrow from the trust for situations like this.

You can be both trustee and be a beneficiary but not the Only beneficiary otherwise there would be no trust

A settlor can be a beneficiary but there are adverse tax consequences so they shouldn’t be.

The settlor’ role is to hand over $10 or so to the trustee and start the trust. So they don’t need to be trustworthy at all as this is their only role. Usually the trustworthy lawyer or accountant performs this role. As you don’t want a family member to do…[Read more]

You probably need to assess how it is and will be expected to perform. If you can get a better return elsewhere then it may be worth selling.

Also factor in the non deductible interest you could save by paying down personal debt with the money released.
And if it has only grown $10k then you might have a capital loss which could be used to offset…[Read more]

Yes that is a tough one.What you could do is to set up a LOC and borrow to pay expenses for the property such as rates, insurance etc. This will free up a few thousand each year and will help, but is slow.You should talk to your tax advisor about borrowing to pay the interest on the IP too. This will speed things up, but needs to be carefully…[Read more]

You can switch your loans around but the important thing is tax deductibility. Paying one loan out with another doesn't change the purpose of the loan.

That’s crazy. A bank cannot make you use a company structure. Maybe they wouldn’t fund it if you bought it in your own name but a company structure is best avoided when buying property. I would advise clients against it