Hi ITYes, bank woud want security – more than neccessary usually.Firstly they would want the trustee to guarantee the loan, then they would want all the unit holders to guarantee the loan. If the unit holders are companies, all the directors, if the unit holders are trusts, then all the trustees.So it can get messy and it can be difficult to find…[Read more]

If you pay off the property and then want to move and buy a new place to live in you could end up with no deductions on the old one and so pay more tax and, since you have no cash left will have to borrow to pay for the new one and the interest won't be deductible.

hi itYou would each have your own units, like shares in a company. eg 100 units with 5 people = 20 units each. You could each hold these units in your own names, or jointly with a spouse, or, preferably via a discretionary trust. What the others do with theirs is up to them, but it would be preferrable if each had their own DT incase of…[Read more]

What state are you in?Sounds like that woman has an equitable interest in the property as she contributed to the purchase price. Since this means she has a caveatable interest it may be hard to remove the caveat by going legal on her, and could be very costly in the supreme court. You may need to negotiate with her, or her parents – maybe they may…[Read more]

Authorities probe sport betting scamsAuthorities are investigating Queensland's sports betting industry, following allegations scams have ripped more than $4 million from punters. Fair Trading investigators recently led multi-agency teams that included Queensland police and the Australian Competition and Consumer Commission in…[Read more]

I would set it up like this:PPOR value = $550,00080% LVR = $440,000Less existing loan of $316,000= LOC of  $124,000IP value = $300,00080% loan = $240,0000So you would have loans like this:1. PPOR of $440,000 = this is secured against your home2. LOC of $124,000  = this is secured against your home3. IP loan of $240,000 = this is secured against y…[Read more]

It would be great if you could get someone to be trustee – and take the risk, but may be hard to do since they would be guaranteeing the loan.

A unit trust is great when different parties are involved. They allow the break up of profit in fixed shares, but offer no tax benefits or asset protection.  Look at having your units owned by a separate discretionary trust.

HiDo you intend to live in the rental property later on? If not, I would be reluctant to pay down the loan as once you pay it down, any withdrawal later will mean the interest will only be deductible if the funds are used for investment/business. So you may end up with a investment property with a very low loan, no cash, and then wish to buy a…[Read more]

Yes, i would pay off the PPOR (if you do not intend to move out) and then reborrow the money to invest,

ATO ID 2001/79 Income Tax Interest expense: Funds…[Read more]

sounds like a lame excuse to me. But if you can find another tenant at the same or higher rent it is 'no skin off your nose'

can be risky. – you may qualify for a loan now, but changing circumstances may mean you won't qualify when it counts.- properties can also drop in value/- opportunity cost. You could be tied up with this and miss out on other opportunites that come up.

One of my friends tried the horizon program. He had been a broker for 10+ years and had dip on fin services, PS 146 etc, and he missed out – it is very hard to get in, but looks like a great program if you can get in.

Edvico_kvn wrote:
Hi Terry,I like your idea of having the LOC pay for the IP running costs (including interest of the I/O loan) and thereby increasing your tax deductible LOC liability over time while at the same time the I/O loan for the IP remaining the same balance and the offset balance increasing over time.Do you recommend using the…[Read more]

remember a trust is not a legal entity, it is just a 'scheme' so it is the trustee that is the legal owner of the trust's assets. Trustee's name goes on title. The loan can be in the trustee's name without mention of the trust or in the name of the trustee as trustee for the XXX trust.And, lenders will require guarantees. This is usually the…[Read more]

yes, this 'loophole' has been closed.

sounds like you are not renting to him, but he is just a boarder! Sharing expenses. should be any tax if just doing this.

deductibility will depend on what the extra withdrawals were used for.

I believe the interest on the redrawn money will be deductible if the money is used for the investment property.But this will be less than ideal for a number of reasons relating to working out the tax. – If the loan is PI and it is decreasing it can be hard to work out the proportion of the interest which should be claimed.- if extra funds are…[Read more]