Before submitting any offer you should get your solicitor to review the contract and to draft addtional clauses – what are the special conditions the vendor wants?

I believe stamp duty could be exempt in VIC for transfers between spouses, even with investment properties. But beware of the ta implications. If you are doing it with the dominant purpose to save tax then the ATO can disallow the deductions under Part IVA.

You sholdn't be using savings for the investment  – or you will be paying more tax. I would suggest you also leave any money in redraw as taking it out will be new borrowings and you will have even more tax problems later on.

Trusts don't have directors – only trustees or or directors of the trustee company.Adding a director will not result in any stamp duty implications.If you have an individual as trustee and want to change this by adding another trustee then this is not so easy. The trustee has the title to property in their names so changing the trustee will result…[Read more]

This is why it is a good reason to use a lawyer rather than a conveyancer. I would probably issue a notice to complete within 14 days and then wait and see what happens. You may have to put it back on the market and keep their deposit and sue for damages.

propertybee wrote:
thanks again xdrew, terryw and streaminvesting.To anyone:  when should we prepare this informal loan document, before purchasing the property ( after making the offer to buy the property or even during the search for the property to buy ) , during purchase, during settlement or after purchase/settlement.  Can this informal l…[Read more]

Only lawyers can prepare legal documents.You can have terms such as interest free, principle payable after x years etc.

Priority.Having an informal loan agreement could mean missing out if things go wrong and other creditors have competing claims and establish greater priority. Having a registered mortgage will give the greatest priority.

Watch out for and/or nominee. If you have not formed the trust before entering the contract you could be up for double stamp duty – check with your solicitor first.Trusts can be set up in a few minutes.

hi LukeI used to be against selling, but now can see the value in it – especially with the greater difficulty in now getting loans.A good reason to sell would be to pay off personal debt. So selling an IP with a lot of equity in it while you have a high non-deductible loan would be an example.If we are talking about selling a PPOR to use the…[Read more]

The only pit fall would be setting it up incorrectly and having the interest denied by the ATO – and possible fine.There are some private rulings in which this strategy has been rejected recently. I have posted links to these here before. you should read those first.

unless you had previously lived in the property by moving in now you would not be able to save much tax at all.

To be exempt from duty the property will have to be used as the main residence at the date of transfer.

you should see a solicitor. You would need a written loan agreement and mortgage drawn up. the mortgage has to be registered with the land titles office in the state of the property. You should prepare it in advance and lodge the mortgage on settlement after the bank lodges theirs.

What is a PSI Trust?PSI could refer to personal services income which is income generated from the effort of a person. Even if run through a trust the income is taxed as if the individual earned it and not the trust. To get the income classed as trust income certain rules have to be met. So be very careful

If you borrow to pay out personal debt the interest will not be deductible.What you could do is to set up your loans carefully so that you may be able to borrow to pay interest expenses on the investment loans and to divert cash to the private debt. You will need professional advice and a private ruling may be a good idea – make sure your…[Read more]

Sounds like you don't really understand trusts. I would suggest you try to learn more before trying to use one. Get some expert advice too.Whether you buy in the trust or not will depend on a whole range of issues. Firstly are you able to borrow 90% with a company as trustee? You should be checking this with your broker and then doing some sums…[Read more]

you can probably keep their deposit and sue them for any shortfall on a subsequent sale. Whether you get anymore money out of them will depend if they have any assets.

It just means income is greater than expenses. You will need to factor in all expenses such as rates etc too. Not necessarily principle of the loan tho.

I should add, that way if you marry someone in 10 days and he/she has 5 children then they will automatically become beneficiaries. If you want to add a company as beneficiary down the track then you can form a new one and become director of it and it will become a beneficiary – then you can distribute to that and cap the tax at 30%.