god_of_money wrote:
Hi Terry"If you start putting salary and wages into an offset you could get into trouble. "I do credit my salary plus rental income etc into offset account with ANZ One.What do you mean by get  into "trouble"

Opps, I was typing too fast. I think I meant LOC – can't see how you could get into trouble with an offset as long…[Read more]

Its common and tax effective to do this. But obtaining a loan for it won't be easy.

Someone else mentioned you cannot direct debt from it – not sure if this is correct or not.

dodgaDo you realize that you can claim the interest on borrowed my to lend to the trust, but you will need to declare the interest the trust pays you as income. They should cancel each other out so you will get no benefit. The trust will get the benefit of claiming the interest it pays you however.Also note the asset protection implications of…[Read more]

Also look at the long term implications. what will happen in a few years when your properties are cashflow positive.

Technically there could be a problem though. As the trust is a discretionary trust, there is no guarantee the trustee will distribute anything at all to you. Although in practice I think banks consider the past performance and ignore this technicallity.Anyway congratulations on becoming partner Dan.

There are a few issues you need to consider, – Possible more in land tax (eg NSW)- You will need to either gift or lend money to the trust to use as the deposit and for ongoing funding- If you gift you cannot claim the interest on the money you borrowed.- If you lend to a trust you can claim the interest you pay as a deduction, but this will be…[Read more]

Yes, used to use them a lot. Bankwest are not so competitive now and are not very trust friendly.St G have 3 different offset accounts, only one of which do the savings come off the interest, the others reduce principle evne on an IO loan.St G's LOC is very good, especially with the ability to have separate accounts set up after settlement and…[Read more]

Sorry, that one was withdrawn, try thisTR 2004/4http://law.ato.gov.au/pdf/pbr/tr2004-004.pdf

TR 2000/17W Income tax: deductions for interest following the Steele decisionhttp://law.ato.gov.au/atolaw/view.htm?locid=%27TXR/TR200017/NAT/ATO%27&PiT=99991231235958

yes. see the Steele case for authority.

stamp duty at market rates too.

I have all 3, ANZ, NAB, and Westpac. I prefer Westpac the best, although their rates are too high. ANZ a close second – they used to have 2 different types of offset, one which didn't kick in until $2000 balance. NAB are a pain in the butt wanting too many questions answered. You shouldn't need to pay any account fees on these banks loans under…[Read more]

Making sure that the payments are going to pay the loan on the property will help, but it doesn't cover a situation where there are others with competing interests in the property.Exchanging contracts does give a buyer an equitable interes in the property, but there could be others with equitable interests too – such as spouses (or even…[Read more]

As as buyer I think your biggest risk is that the vendor still retains title and will have the property mortgaged. If they don't pay their loan, or other loans, or are sued for something totally unrelated, then the bank could take repossession of the property.Lodging a caveat will prevent them dealing further with that property and may help you…[Read more]

I would suggest look at buying the relative out and then set up LOCs on one or both properties. Use these for deposits on the next IP purchase. Always keep a buffer of around 6 months to 12 months repayments available and borrow no more than 80%.

There are two issues – equity and serviceablity. You will need both.If you borrowed 95% and your property hasn't gone up much, then you have hardly any equity. If the proeprty has gone up then you will need to squeeze out at least 10% for the new purchase. 5% deposit and 5% for costs.For the income you can take potential rent into account as well…[Read more]

The ATO has released a ruling basically saying borrowing to pay interest is deductible if the original interest is deductible.It could be a good idea if you still have a non deductible loan as you can free up cash flow to pay down that faster. But you really are only bring forward the deduction – so whether it is good to do will depend on this fin…[Read more]

A LOC is not really necessary, a simple IO loan would do.This is why going with a non bank lender is not always ideal!- difficult to access equity- other products may not be so cheap- highish exit fees.

Terryw wrote:
Just take a LOC out on the PPOR with CBA.Use the LOC to pay for the deposit and costs of the new property and borrow the rest from another bank.

Sorry, I should have written myrate instead of CBA