I think the doing up part comes down to the sums. It is only worth repairing or doing up if it will bring in more funds than the cost of doing it.Also, I would suggest selling now to buy 2 investment properties may not be such a good idea. For starters you will lose the CGT concession and the market is pretty flat now in Sydney – you may get more…[Read more]

fmacdonald wrote:
Thanks for all your help. Bit a thinking to do.  We have owned the house for 15 years and for the first 5 it was rented, I assume this makes no difference?

It does make a difference.The house wouldn't (probably) be CGT exempt for the first 5 years it was rented. So you would need to factor this into your calculations.

JacM wrote:
On a similar note… let's say I have a PPOR that I am sick of living in and want to move.  Let's say that PPOR is on a P&I loan with ANZ at the moment.  What is the best way to convert this PPOR into an IP that has deductible interest, and suck as much money out as possible to put into a new PPOR?  (Or perhaps I shouldn't buy an…[Read more]

I also forgot to mention another possible way.Get a LOC set up and borrow to all expenses associated with the PPOR from the date it becomes a rental. If done properly you could even borrow to pay the interest on this small loan. This will free up cash to pay into the new PPOR loan and will gradually help you pay it off faster by decreasing the non…[Read more]

dotoh wrote:
hi there,I have a "friend" who sold/transferred  his house(investment property) in 2005 for around 174,000AUD to his close "mate", as he was in a spot of bother due to mental health issues, all done in a legitimate way. He now is in the process of buying back the property and has had a sworn valuation on the property done which c…[Read more]

it is in the bank's best interest to cross your loans – not in your interest at all. 

Why are you paying PI on the first property if you don't intend to live in it? This = throwing money away.I would suggest you keep both loans IO and save all you cash in the offset and not pay either down. You may find your circumstances will chance and you may not end up moving it – so if you have paid the loan down this would result in further…[Read more]

fmacdonald wrote:
HiIt seems this question has been asked many times before however was not sure what options I had if I want to keep the current house.Wife and I own a house with very little mortgage left and would like to buy a new place (with 100% loan) and keep the old place as a rental.My understanding is that I can't transfer the debt…[Read more]

If you were to purchase it under a vendor finance arrangement the mark up is generally 20% above market value with an interest rate of 2 – 3% more than the banks. Much cheaper to go through a bank if you can

I suggest you do the figures for 10 years with different rates for growth etc.Also consider selling the investment property, paying down non-deductible debt and then reborrowing and buying a similar property again – but this time your tax deductions will be much larger with the only loss being the stamp duty and selling costs.

I haven't read the other replies…… but there are a few things to consider. Firstly the ATO could possible apply part IVA of the tax act to deny deductibility as it seems to be a scheme with the dominant purpose to save tax.There is also the fact that since you are defacto you will only be allowed one main residence with CGT exemption between…[Read more]

There are tax and asset protection implications on doing this.Firstly, if you gift to a trust it is not returnable, but can be clawed back in some instances. However, if loaned to a trust the money is always returnable to you. Therefore lending is less safe from an asset protection point of view.But there are tax implications. If you currently…[Read more]

Just do your own in excel. That way you learn more as well.

alex mastoris wrote:
if i was to purchace multiple investment properties how would i limit / reduce the land tax payable? i am thinking along the lines of setting up induvidual companies for each property and then draw a wage / salary, will this work? 

And then pay more in CGT when you sell. Land tax differs from State to State, so an answer on…[Read more]

exitpoll wrote:
I'm no accountant, but following both the Accountant and Dan's thinking, you might be able to borrow money to lend to the trust, NOT with the intention of earning a distribution from the trust (because the trust's income distribution is discretionary), but rather with the intention of earning a rate return a couple of points (or…[Read more]

You won't find it explained anywhere really. It is basically just borrowing to pay interest. It has to be set up correctly and you might need a private ruling from the ATO  to prevent them claiming later that it was a scheme to save tax. it is best to speak to your accountant – if he says it can't be done come back here.

Yes you should be talking to an accountant as you may be missing out a many deductions – are you claiming depreciation too?I was thinking you may be able to claim even more by setting up a new LOC on your PPOR and then borrowing money to pay the interest on the loan, or at least, the shortfall each month. This will increase your deductions and…[Read more]

I agree that it should pose no problems if all the LOC is used only for investment purposes.But if you have the option why not split it up into several sub accounts in case you wish to use one for private expenses later? You may also want to capitalise interest on one and keep it separate in case you have problems with deductibility later it will…[Read more]

I wouldn't buy in a country town. There are plenty of cheap houses in Sydney and these would probably have more growth potential in CG and rental increases. Try Campbelltown and Mt Duritt areas – my mate just sold a 3 bedroom house in Whalen, near Mt Duritt for $220,000 – think it was renting for close to $300 pw.

The ATO is concerned with anything that may save someone tax. It is still possible to do though.see this private ruling for example:PBR 83291http://www.ato.gov.au/rba/content.asp?doc=/RBA/Content/83291.htmandPBR Authorisation Number: 1011415913206http://www.ato.gov.au/rba/content.asp?doc=/RBA/Content/1011415913206.htmSee also this old TR…[Read more]