You are ahead in your repayments so you could ask your lender about a repayment holiday for 6 months. let the loan capitalise up a bit – only necessary if you are going to move out soon. better to have $7k for the new home than the old.

ryan mclean wrote:
Sometimes lenders will only lend 80% LVR because it goes through their business section For a first deal buying in your own name is sometimes more straightforward and less complicated.

This would generally only be for those trusts with corporate trustee.

dreamteam wrote:
And the disadvantages are: Cost to set up (say, $1500) ongoing costs (say $1000 p.a.) more paperwork & reporting cannot negative gear ie.offset losses against other income pay land tax regardless with no tax free threshold Have I missed anything?

Legal ComplexityTax complexity

redraw = reborrowing. deposit = repaymentDeductibility depends on the purpose the funds are used for.ATO may never find out of course. They do sometimes send out questionaires to property owners asking a number of questions including asking if any loans have been increased.Do you mean you will pay more interest for the loan with the offset? if not…[Read more]

yes. that is possible.

Asset protectionTax flexibilityEstate planning flexibilityFinance flexibilityeasy to transfer control without changing title

noYou will have two loans, $200,000 and $30,000. Interest will only be deductible based on the purpose of the borrowings. If $30,000 was spent on the property it might be deductible.

i think i should have said "wear the losses"If you are serious about investing then use a trust, even if it may cost you a bit extra in taxes in the early stages as the long term benefits will out weight the short term costs.

You can't have your cake and eat it too.There is no structure where you can have asset protection, max tax flexibility and negative gear your personal income. (there is if you are self employed).I personally would probably where the losses early on as the long term benefits will be great.

Discretionary trusts are the greatest vehicle to own appreciating assets. But they do have some disadvantages in the early stages. If you can get through that hurdle you will be laughing.

Seek professional tax advise on this strategy:Set up a LOC on your home loan on the spare equity. Borrow from this LOC to pay the shortfall on hte investment property and possibly the whole interest on this loan. Use the cash that you would have paid for the investment by placing it in a 100% offset account against your home loan. Put all wages…[Read more]

If he lives in it first before renting and later moves out it is possible to rent it out and retain the CGT for a period of up to 6 years. If he moves in again before the 6 year period and then out again the period starts  again.If he moved in and then out and decides not to rent it but to leave it empty then he could keep it CGT free…[Read more]

With unit trusts the entitlements are fixed. The trust consists of unit holders who own fixed percentages. All profits go to the unit holders in proportion to their holdings. The units could be held by an individual, company or discretionary trust. Unit trusts are generally good for two or more separate parties to go into a venture together as…[Read more]

Are all of their loans mortgage insured?

Strictly speaking there is no guarantee a trustee will ever distribute to a particular beneficiary. So if you build up a large asset base in the trust and guarantee the loans you will have a large debt by no guarantee of income (if you did have a guaranteed income stream from the trust there would be no asset protection).But in practice banks…[Read more]

I would suggest you run some figures on both scenarios. It will be impossible to comment without doing the figures. If using a trust is not going to make much difference they the benefits will be well worth it.Occupation is only one reason for asset protection. Most people that go bankrupt don't go bankrupt because of an occupation related…[Read more]

1. You need to convey it by filling in a transfer form and paying stamp duty – if applicable.2. Yes. You will have to pay out the existing loan.3. You will need to change the loan because the ownership is changing. Both names will need to go on the new loan. 4. Yes, but you may need approval of the FIRB.What you will need to do is to tell your…[Read more]

you don't want to risk your parents personal assets as well as getting them on the loan. I would suggest the same as Greg. Just borrow as much as you can on your own and then the rest from your parents. i wouldn't suggest they guarantee the loan as it just adds added risk, probably unnecessarily.  You can still use a trust, but please beware as…[Read more]

Also consider using less cash may mean you have more cash for your PPOR loan or offset account saving you non deductible interest too

I think it is probably worth paying for in the early stages. Try to get it added to the loan, so that it does not come out of your pocket, but you will still be able to claim it as a deduction (over 5 years).Also consider if the long run the amount paid will be insignificant compared to the growth.I remember I paid something like $5,000 LMI on a…[Read more]