omiy wrote:
Hi Terry,Thanks for that. Should I withdraw any extra repayments and put that into an offset account when I change to IO laon? Can you recommend any lenders? ThanksLucia

Withdrawing funds = borrowing. So it you borrow to invest in an offset account you will not have a reason to claim the interest on this new borrowing.

mxd wrote:
it feels risky,if you can pay 140K off in 12 months or so with the addition of 650 week (35K pa) then you would have you PPoR paid off in < than 2 years so I would probably not push my luck with the ATO.

Some have private binding rulings. Its worth a try with a ruling I think

Look directly at the relevant section in the Income Tax Assessment Act 1997, s 118-145.http://www.austlii.edu.au/au/legis/cth/consol_act/itaa1997240/s118.145.html

You can increase the loan up to 80% of the value of the property (without LMI) assuming you can service. But your mum must agree to this. How you use the funds is up to you and your mum,

GlennsaSounds like you have heard of the Harts case. Many years ago a lender set up a loan product which was split into 2. One loan for for the investment property and the other for the home loan. The borrower then put all money to the home loan and all the interest on the investment loan capitalised.It went all the way to the high court who ruled…[Read more]

This is good. Also note you will be able to claim tax deductions -likely to be depreciation on these systems.

Change the loan to IO asap.Every withdrawal from a loan is new borrowings – so the interest will only be deduction if the new borrowings were used for investment purposes.

It would be extremely rare for this to happen in Australia. A council could take action against a person to recover monies, get a judgment and then an order to sell property – but even if it did you would not necessarliy be getting it cheaply. The property would probably be auctioned.

Why assume that?see the case of Steele Steele v. FC of T 99 ATC 4242; (1999) 41 ATR 139And TR 2004/4Income tax: deductions for interest incurred prior to the commencement of, or following the cessation of, relevant income earning activitieshttp://law.ato.gov.au/atolaw/view.htm?Docid=TXR/TR20044/NAT/ATO/00001

What about one for doctors that rebate the medicare fee?

See TD 51 here http://law.ato.gov.au/atolaw/view.htm?locid=%27CGD/TD51/NAT/ATO%27&PiT=99991231235958

That book is written by Julia Hartman, with a bit of Noel on the side. Julia is excellent on the tax aspects.But, with the boarders, this may not be the case. You would be only renting out part of the house – so would only partially lose the CGT exemption.And, if they were boarders, paying money for food and expenses, then maybe not CGT or income…[Read more]

Do you own a home or are you renting?I would probably buy a cheapish home (if you haven't got one), and then reborrow the money to invest.

Richard, Richard is in SA = South Africa. I took at as South Australia on first glance too.

They won't discharge unless you pay out the loan.

A contract for land is not enforceable unless you have it in writing – so if you have their signed copy they are locked in and vice versa.  You could both get together and sign 2 copies – one for you and one for them.

One of my clients recently got audited by the OSR. What they do is send you a letter, initially, and ask you to provide proof that you were living in the property. If they are satisfied they probably won't take the matter further, but they could do so if suspicious about something  -especially if someone has made some allegations.

s 126-5 ITAA 1997 covers CGT and marriage breakdownshttp://www.austlii.edu.au/au/legis/cth/consol_act/itaa1997240/s126.5.htmls 68 Duties Act (NSW) covers the stamp duty and marriage breakdownshttp://www.austlii.edu.au/au/legis/nsw/consol_act/da199793/s68.htmlIf the property has been your main residence for the whole period it will probably be CGT…[Read more]

I agree, IO with 100% offset – don't pay it down as it will be an investment

Look at the latest flash at http://www.bantacs.com.au. They have a private ruling on capitalising interest