My answers, not having read the above answers.1. Yes, interest will be charge as soon as you use the money.2. Rent should be paid into your 100% offset account attached to your home loan, ideally. From there you can direct debit it. You cannot rely on the rent to pay the interest as it will vary each month, and sometimes will be late.3. There are…[Read more]

Generally banks won't take it into account as they consider it a one off event, but if you are doing it consistantly you may be able to argue you are doing it as a business. But then you run the risk of them treating you as a commerical client and they may also worry they will just fund you and then you will sell again – discharing their loan.

Actually there is a requirement for beneficiaries to be determined with certainty and it can't be too broad. I recall hearing one story that someone tried stapling the white pages to his trust deed and have everyone listed as a beneficairy – but this didn't work.

Discretionary trusts offer the best asset protection too.Most deeds are worded so as they include future people too – those not yet born such as kids, grandkids should be covered too.

Hi AndrewI am not entirely sure of the full features – but it appears from what is written above that they don't allow direct debits and have minimum balance requirements etc.

Some pointsWhat about the splitting of income with your wife. You earn $60k, she earns $5k. You are wasting her tax free threshold as she can earn up t $16k without paying tax.You also say you have a mortgage of $300k. If so I would not be putting down a cash deposit on the investment property. I would put this cash on the home loan and then…[Read more]

On the deductibility issue seeTR 2000/2 Income tax: deductibility of interest on moneys drawn down under line of credit facilities and redraw facilities http://law.ato.gov.au/atolaw/view.htm?docid=TXR/TR20002/NAT/ATO/00001

yes you can. Offsets are usually just like normal savings accounts – except for CBA.

But if you moved out it would be too late. Your whole loan may be undeductible.When you originally borrowed the money it would have been used to purchase the house, but as you put money into the loan this is a repayment. When you take money out this is new borrowings. So the original borrowings used for the house purchase may be rapidly reduced to…[Read more]

Hi againI think your LOC method will work, but if you were to ever move out of your house and rent it you would have tax problems. If you had no intention (remember things change) then it will be ok – except you will be paying a slighty higher rate for no reason.

I wouldn't use a LOC on my main home loan either. Why not just an offset account? I hope you were not going to take the deposit for the IP from that LOC as you would rapidly lose deductibility, but still have a large loan.Look at ANZ, Westpac, NAB for IO loans with offset.

The way I would structure a loan is like this:Main Residence, IO loan with 100% offset accountIf there is any equity in the main residence, then LOC up to 80%IP 1IO loan 80%, with 20% from the LOCIP 2 IO loan 80% with 20% from the LOCetcetcIf you pay off your main residence loan, then I would increase the LOC on it and set up an offset account on…[Read more]

Hello JacquiIO loans usually have the same exit fees as PI loans. Not usually any extra penalties or restrictions. IO loans are generally IO for an initial period (usually 5 to 10 years) and then revert to PI, or you can extend the IO period.I don't like the sound of that misa account! Don't know about distinguishing it from the loan with deposits…[Read more]

Yes, since you are the builder you enter into a building contract with the owner of the land and the bank should be able to lend 80% of the contract value + 80% of land value. That should be more than enough to construct.80% or even 90% on land should be possible

There are a few choices:Your nameHer nameBoth namesTrustCompanySuperfund.Since you run a small business, as a sole trader (which is dangerous) you run the risk of being sued. You could buy in the wife's name or in a discretionary trust for greater asset protection. The downside with trusts is the large loss will not reduce you tax, but the upside…[Read more]

Nil, generally, I beleive. But I think there was a short period where it was 4%

LOCs are great, but they should only be used to access equity.By using a LOC to deposit and withdraw money you could be creating tax issues down the track. You can acheive the same effect by using a 100% offset with a IO loan (or even a PI loan) – plus htey are cheaper as GOM points out.

hi JLook at 100% offset account instead of a LOC. But I wouldn't break a loan to pay 2% more just to use the offset (or LOC) unless you have very large amounts of cash laying around.

Its probably best if he keeps his cash, then borrows from your LOC. but it depends on your situation. eg. it might be good if he can put the cash into an offset account – on your PPOR loan or on the new one.It would reduce his borrowing capacity in the future if he goes on the LOC with you as he would have more debt. (technically borrowing from…[Read more]

you could probably set up the LOC with both names – but why? You will be reducing borrowing capacity and increasing risk.It shouldn't have any effect on tax if it is in one name or two. I would suggest you chip in your half and then draw up a loan agreement to lend him his half of the deposit.