The trouble with this is that deductibility depends on the names of title – in general.

It may be possible to have separate loans, by your sister guaranteeing your loan and you guaranteeing her loan, but this may not be effective for you to claim the entire interest on your loan.

So you should check with an accountant before doing anything.

Ashley C wrote:
Hi Henry, be very careful of that sort of strategy.  The ATO certainly does not like this sort of thing and have even published a "taxpayer alert" on one such scheme.http://law.ato.gov.au/atolaw/view.htm?docid=TPA/TA20011/NAT/ATO/00001The other factor to consider is that if using a trust to purchase a ppor then the CGT main…[Read more]

The direct link doesn't seem to be working atm, try http://www.ato.gov.au/rba/disclaimer.aspx and use the ruling number to search

I agree that you have to be careful. You would need advice and possibly a private rulingHere is a a link to a private ruling where someone rented from a trust which they controlledPBR Authorisation Number: 1011415913206http://www.ato.gov.au/rba/content.asp?doc=/RBA/Content/1011415913206.htm

AllanP wrote:
H So pretty much in a nutshell i can claim depreciation on this property in Adelaide while living in Brisbane and still be exempt from capital gains tax because the house was initially my PPOR? Providing i dont do it for more than 6 years. 

This could be the case, but there are many other factors that need to be considered.

In that case if you fix you will be saving 0.46% for 3 years off what your paying now. If rates go higher you will save more, but if they go down then you won't be saving as much.You also have to factor in other factors such as break costs. What if you want to change banks or sell the house for example

In this global climate do you think rates are likely to go up or down?

BTW, if you did your option 2 and used $250,000 to buy the IP:$250,000 x 7% = $17,500That means you would have had $17,500 less in tax deductions!That is a huge difference in tax

I would do neither. You would want to minimise the size of your PPOR loan and maximise the investment loan to enable you to save more tax.Richard's method makes sense.Loan 1. A small PPOR loan by using $250,000 as deposit.Loan 2. You then take out a LOC up to 80% of the value of this.Loan 3 for the new property. IO as high LVR as possible with the…[Read more]

Mick – think you mean only fixed trusts get the land tax threshold.Getting the land tax bill must have been a bot of a shock to you. But hopefully the income tax advantages make it worthwhile

Firstly, you will also need to factor in tax deductions.Secondly, if you are doing it with the intention of paying your home loan off sooner then the ATO probably won't allow it. see TD 2011/D8

excellent!

GST is very confusing, especially with property.This is my understanding:Residential property is generally exempt from GST. But new property is not. New is classed as something completed in the last 5 years.When you construct a property you will be charged GST on materials and labour. And when you sell you will have to charge the buyer GST if sold…[Read more]

A solicitor with a knowledge of taxation could also assist.

Who is your current lender? And are you on a package with them?

A registered mortgage is one that is legally documented with registration at the land titles office.An equitable mortgage would be one that is unregistered.Generally registered takes priority over non registered, but first in time also takes priority over later and the rules are very complex so even if you give someone else a registered mortgage…[Read more]

I don't know about claiming GST. But if you buy using a company you wouldn't get the 50% CGT exemption.

Depends on you do it.If you borrow money and place it in a savings account with other funds before using it then it is no longer borrowed money at the time you use it.

what about paying with credit card first and then paying the credit card direct with redraw>?

Yes, you def need to see a tax advisor as you will need to overcome the Personal Services Income Rules.(which could mean any income earned by the 'company' is actually your money).Also you should never buy any assets in a trading entity because of the risk involved with business. If the business where to fail you could lose all the assets owned by…[Read more]