paulandjo wrote:
Hi all. I am a full time housewife who managed to buy a + cash flow property entirely in my name using the equity in my PPOR and my husband as Guarantor. That was in 2009. I would like to sell the property next year as it has increased in value by roughly 200k and i have losses of roughly 30k from other properties my husband a…[Read more]

ColinAn adult can acutally earn up to $16,000 pa tax free when the low income tax rebate is taken into account. This will raise to about $20k next year (or the year after?). This makes using a discretionary trust very attractive now.

Thanks Paul.

HmmThere is not CGT on the family home. Even if you inherit it you will not have to pay CGT unless you rent it out and later sell it. Stamp duty exemptions would apply to the transfer post death too.If you buy the house now you will pay stamp duty.Anyway, 1. Yes2. You would still have a debt to the estate. But the parent could forgive the loan in…[Read more]

paulandjo wrote:

Terryw wrote:
Not many ways to avoid CGT.At least you are on a low income, so the effect will be less. If you have a $200,000 gain then take off buying and selling costs, say $40,000 and then apply the 50% CGT discount = a taxable gain of $80,000 this would be added to your other income.Selling to a trust won't assit with…[Read more]

khristie wrote:
Thanks Terry,I have received some advise that if we were remove all deposits and withdrawals from this home loan and leave as just the interest only payments and deductions that we will be back on track for 2011-2012 tax return.

I don't know about that. You have a mxied purpose loan now, but the ATO may allow an exception where…[Read more]

Ideally you should keep business and pleasure separate. But it could be done with a mixed loan and the interes worked out, but this will create possible problems later when trying to pay off the private debt first.

Sounds very complex. Her not being able to qualify for the loans makes it even harder. What about if she just sells "her" property and takes the proceeds. That would save you from having to guarantee the loan (but I guess she is probably living in this one).

khristie wrote:
Thanks for the reply Darren. Some additional information that I should have noted is that we have a second rental property which is also managed by the same property manager. At the end of everymonth the income after expenses she has paid is also put into this account. I then each month pay from that loan the interest only as…[Read more]

Not many ways to avoid CGT.At least you are on a low income, so the effect will be less. If you have a $200,000 gain then take off buying and selling costs, say $40,000 and then apply the 50% CGT discount = a taxable gain of $80,000 this would be added to your other income.Selling to a trust won't assit with this, CGT will still apply at market…[Read more]

I think you have gotten yourself into a big mess unfortunately.Refinancing won't help you claim any of the interest because the interest will retain the character of the original borrowings.Everytime you make a deposit to the loan this is a repayment.Everytime you make a withdrawal from the loan this is new borrowings.So if you withdraw $100 for…[Read more]

Only interest on borrowings used to invest will be deductible. So if you use the LOC for private expenses and then later for investment the use will be mixed. You would have to work out the proportions used for private/investments and portion the interest.Where you will get into trouble is if you want to pay down the private part. Any payment to…[Read more]

its not that hard either!

Its actually amazing how many people sign agreements without reading them at all.So from an agent's perspective it is worth a punt by putting in all sorts of extra charges which they would just remove if asked.

Yep, thats right.You might have to amend your tax return if already lodged and you made a mistake.

Cheese,Sorry Loan 2 is secured against property 1. The idea to to get as much borrowings as possible in relation to property 1 so as to free up cash for property 2.You will have to work out any costs and see if it saves you. There should really be any additional costs, but maybe an extra 0.1% on the interest rate for a LOC.It may be a bit of an…[Read more]

there are different depreciation rates for different items. The Building depreciation rate is 2.5% per year for 40 years, but this only applies for the building itself and some other items, maybe kitchen etc. The other items, such as fittings and fixtures, carperts, stove, dishwasher etc are depreciated at a higher and faster rate.In your…[Read more]

I'd probably structure it slightly different, depending on how much equity you have.Loan 1, existing $200,000. Secured on Property 1 current PPOR. Make this IO asap so you stop paying it down.Offset 1. Set this up on loan 1 and pay all spare cash into it.Loan 2. Set up a LOC. Use this LOC to pay for all expenses relating to Property 1. Such as…[Read more]

Paul,I've never thought about this before, but what would happen if you had an option exerciseable in 1 year. You included a contract of sale with the terms of the purchase. Assume it is NSW. For a contract to be valid (or enforceable) it has to include searches such as a s149 certificate.These certificates expire, I think it is about  months for…[Read more]

Wiwin wrote:
So we were using equity  from the 1st IP for 2nd IP deposit. Bank will increase the bank loan right? isn't it means that we have to pay more loan ? just for example 1st IP bank loan 300K, after 2 years the value increased by 100K, and i used it for deposit 2nd IP, duty stamp etc. I will have 400 K on loan for the 1st IP and an…[Read more]