residential land is generally subject to GST so if you are registered or required to be registered and are conducting an enterprise you will need to remit 1/11 of the purchase price to the ATO.

Seek specific tax advice.

Why would someone want to enter into such a deal? The entry and exit costs would be about 10%, the property would be cashflow negative and the prices may drop in 3 years. What is the potential advantage for a buyer?

You are confusing a few issues here.
The unit holders could potentially borrow to acquire units in the trust. If it is a fixed trust they could claim the interest on borrowings used to acquire these units. Claim the interest against their personal income.

The trustee could borrow to acquire a property and any interest on such a loan would…[Read more]

Not if you sell it to a trust first. Main residence won’t apply to trust owned property.

Another option is to sell first one after subdivison and then sell it after 3 months, CGT free potentially. The second one can then become main residence.

one way is to sell to a related entity just before sub division

Yes you will be up for CGT or icnome tax and possibly GST.

There are ways to minimise or eliminate these though so make sure you seek tax advice.

Don’t forget most also factor in existing debts as PI over loan terms less the IO term.
so if you had a 5 year IO term on a 30 year loan and then next day go and get a new loan, the first loan will be assessed as if it is a 25 year PI loan – usually at 7%+

And that is why it is so hard to buy multiple properties quickly these days.

There is a a complex area of law known as ‘equity’ which could also throw several spanners in the works.

Is the person advising on this a practising solicitor? You should seek advice on your equitable interest in the property. Even though you may not have a legal interest you could have recourse if you have paid for the property in part.

There is a a complex area of law known as ‘equity’ which could also throw several spanners in the works.

Is the person advising on this a practising solicitor? You should seek advice on your equitable interest in the property. Even though you may not have a legal interest you could have recourse if you have paid for the property in part.

If no mortgage then there should be nothing to discharge or register.

See above.
Heaps of legal implications.
Costs include legal advice, tax advice, conveyancing, mortgage discharge new loan costs and registration of mortgage, stamp duty and possibly CGT unless the main residence exemption can apply.

Not correct Benny

A valuation is only needed if an existing main residence becomes income producing.

In this case an investment property is moved into so a valuation can’t be used.
The CGT will be worked out on the portion of the time that the property was a rental.

example.
$100,000 purchase price.
Lived in it for 1 year, then moved in.
If…[Read more]

It would never be exempt if it was originally an investment property

‘roll over’ is a vague term. What do you mean by it?

1. Seek financial advice
2. Seek legal advice – why do you want to do this and do you know the consequences?
3. why?
4. seek legal advice and financial advice
5. seek legal advice and financial advice and ask yourself ‘why?’

Yes
s118-185 ITAA97
Apportionment

Keep good records of 3rd element cost base expenses.

A joint purchase could help him where he could not borrow on his own.

Or perhaps you could lend him the full purchase price and he could refinance this later when his serviceability improves.

It might also be good if he can buy a main residence and use the 6 year rule to rent it out and avoid CGT too.

yes it could help. You would need to argue that you are not an owner of the business and do not have access to the company financials. If the shareholders have the same surname as you this may be difficult though.

Yes I have done these for clients who qualify by being in a relevant profession such as lawyers or accountants or doctors. In the past I have increased someone’s existing loan to 90% LVR with no LMI. Most major banks offer these waivers.

But the new ‘rules’ may make this more difficult as you have to overcome the cash out restrictions.

yes should be able to. Interest on the deposit too. Don’t forget council rates as adjusted at settlement

Yes probably – incidental use may be ok but you will have to get some specific advice as it is a bit of a grey area.