I am not sure of the differences either, but have that ridiculously expensive book "trust structures guide" which outlines the various types of trusts and their differences.It says "The fixed unit trust differs from an ordinary unit trust in that the provisions dealing with the issue of futher units and the redemption of units by the trustee…[Read more]

Paying off personal debt sounds like a good idea. You can always reborrow to pay any CGT – though I am not sure of the deductibility of interest on funds used to pay tax debts.

Bluestone have also pulled the pin!

beware of cold callers

You can usually make extra repayments on most loans these days without penalty except the fixed ones.

Hi LinarWith a trust the income retains its character when passed through. I am not quiet sure if it is the same with a unit trust, but think so. So if the unit holder is a person, then the person may be able to claim the 50% cgt exemption if the asset was held more than 12 months.

It may be a good idea to get an extra loan on one or both investment properties (depending on the LVRs) and to use this for deposit on the new investment property

The main difference with a IO loan and a LOC is that with a LOC you would be able to withdraw excess funds easier, maybe without fees and with a cheque book. Offset accounts are not available on LOCs.

In the good old days all the banks had the same rates with the same increases in line with the RBA increases, but things have changed in the recent months. I guess there is no guarantee things will stay the same, but you may as well go with the cheapest now, just in case.

kris07 wrote:
Terry: How long would I have to stay in the property to avoid CGT for up to 6 years? I think its 2 months however not certain, can you please clarify.

That is a question for your accountant. The legislation on this doesn't specify a minimum period that you need to stay in your property for it to be classed as your main residence.…[Read more]

I would just get a IO loan with the deposit coming from the LOC (which should not be used for personal expenses). The 2 properties shouldn't be cross collateralised. An offset account shouldn't be needed on this one, but would be a good idea on the PPOR loan.

Sounds like a complainer. It must be very stressful – I had one like this before with the property manager just ringing me weekly with new things to fix. I did so at first and then just had to start saying "no". Maybe you should ask her to leave, saying you are going to sell the place or something, and then find a new tenant.

If you read any mortgage agreement in full you probably wouldn't want to sign it – but you have no choice really as they are all the same. You probably need the bank's permission to renovate the kitchen for example.The UCCC covers the borrower in cases of hardship etc. so having it apply can help if you fall behind in repayments etc.

I agree that a high LVR would be good with a 100% offset account with all of your spare cash in there. ANd remember if you were to move in initially you could move out and rent your home and still have it CGT exempt for up to 6 years and be able to negative gear it.

The family law court can unravel trusts and companies when looking at property settlements so these will not necessarily help in this regard. There are other good reasons to have a  trust too, so they are still worth looking at. I think the only way to be totally safe is to live separately and be celibate!

It is theoretically possible, but you would have to structure the option agreement so allow you to auction the property. You will not own it at this stage, but just have an option. So the owenr will need to agree with the sale

I think it would incur stamp duty unless you are getting a divorce and have court orders relating to the division of property, but  may be possible in some states to transfer between spouses without stamp duty, so best to check with the OSR.It may still be worth doing as you will save a lot in tax. Do the figures and see how long it will take to…[Read more]

You could also try http://www.guardianpartners.com.au

There are probably a few out there. RAMS was good for some products such as 80% No Docs and 85% Low Docs and now they have the 90% Low Docs, but for the full doc loans they are probably not the best. Don't worry too much as many other lenders had to put up their rates too – Macquarie etc so you may have been hit wherever you went.

CJWentworth wrote:
Thanks so much for your wisdom Terry,I'd still like to know how one would prove that if I pay an extra 5831.90 into my home loan, that it won't be considered as paying off the "shares" portion of the loan… I suppose this is why people generally take out a new loan to invest in shares (via margin lending?)Thank you again

Hi…[Read more]