heaps of issues with smsf. You would be unable to stay in it if you purchase in the SMSF. You would also likely to have problems building.Since you will be owner building and have a bit of equity you might consider buying the land with an 80% LVR loan and then setting up a LOC on the PPOR and using this to complete the build. Once the project is…[Read more]

There is a tax ruling which you could rely on to fix things now. If you can demonstrate how much of the loan is related to investment v non investment you can split the loan.So what you hsould do is to split the loan into 2, one being the investment portion and one being the personal portion. You can then add on a LOC separate to these for the…[Read more]

Yes, def don't use a LOC for a standard loan because of the tax issues. If you do you will be left wtih a large loan with none of the interest deductible. Only use a LOC for deposits and other IP costs.

kong71286 wrote:
Interest earned from your savings is taxed, whereas interest saved from your loan is notFor instance if you have $100,000 savings@6% interest p.a., and are at the marginal tax rate of 30%, then you would earn $6,000 per year, but then be taxed on $1,800 and be left with $4,200On the other hand, if you were to place that money in…[Read more]

If you have non deductible debt then you should have the offset account on this loan. If you set up a second one on an investment loan you will end up paying more tax.

The title is unlikely to pass to you until you pay the final payment. They could be just  after the initial $1k, but probably would like to make more by getting you into the house. They will likely charge you a premium on the rent and a premium on the price you pay for it. if prices are rising then this can work in your favour, but when prices…[Read more]

Hi OssiFirstly, you have little equity and virtually none that is usable. But this will come hopefully.The trouble with 2 on title is 2 on loans. So you and the friend would need to apply for an increase. Both of you incomes etc would need to be proven again. You would both be jointly and severally liable. It could be possible to get the LOC in…[Read more]

oscar1 wrote:

Terryw wrote:
Few comments:If you borrow extra and leave it in redraw it will be treated as a new loan once money is withdrawn from the redraw. Deductibility will depend on how the funds are used. If you take money for rates etc then it would generally be deductible. But if you transfer the money from redraw to an offset account…[Read more]

I odn't think part IVA could apply unless you were paying interest with further borrowings in a scheme like fashion to enable you to pay down your PPOR loan faster – and even then only maybe.

Few comments:If you borrow extra and leave it in redraw it will be treated as a new loan once money is withdrawn from the redraw. Deductibility will depend on how the funds are used. If you take money for rates etc then it would generally be deductible. But if you transfer the money from redraw to an offset account to write a cheque, then the…[Read more]

I am a solicitor with knowledge of trusts and I would like to offer that I have a look at the trust set up for you to see if I can help or make some suggestions.

I think LOCs would be great if it wasn't for the tax issues. I would recomend people NOT use them for the main loan because of this. Only for accessing equity.

surfsup008 wrote:
Hi Paul,Thanks for your info. I understand how that structure would work. The other important point to raise which I forgot to make clear in initial post is that the investor would be looking to pay for the entire process… ie 100% cash for property and 100% cash for renos (it should be noted investor is not in the mafia..…[Read more]

waydo77 wrote:
so would the best way going forward be to put the next ip in my name or joint with my partner or even in a trust structure/business entity is what i am asking? i just hear all the time that it is bad to buy property in your own name and better to buy through a trust structure or business entity? do you have offices in adelaide…[Read more]

Redrawing funds to reno or use on that property would make the loan deductible when the property is rented out – but you would have expended the funds anyway.Sharve's post has merit. Especially in VIC where there may be no stamp duty payable.

6 years is the limit, but you may be able to claim a partial exemption at least. Best to save as much as you can. Check with your accountant.

If you have been absent less than 6 years you could possibly claim the first house as your main residence and sell it CGT free.But the new house will be subject to CGT.

If you borrow extra on IP 1 to pay for the loan on IP 2 then sell IP2 the interest on IP1 new loan wll no longer be deductible because you have sold the property the loan relates to.

The loan amount after redraw would not be completely deductible. The redrawn $50,000 would be treated as a separate loan. Since you have borrowed this to park into a separate account the interest would not be deductible.This is why it is important to get the structure right. If this really did happen, ie you were $50,000 ahead in your home loan…[Read more]

heaps of issues with structuring.If you have paid off your main residence you may want to consider using a discretionary trust,