I agree with Wasp. It is far from certain that the capitalised interest on these cashflow loans can be deductible. As far as I know there is no private ruling on these products. But I think they have good reason to think it is, but not certain.Also I believe there is no difference in these loans and paying from a LOC or capitalising interest in…[Read more]

St George have a newish product at 100% LVR with no LMI – but they charge a higher rate to compensate, so you would be better off paying the LMI. It is only for owner occupied too I think.

Sounds just like a business selling a commodity, which is houses in this case. I guess they mean they have positive cashflow because they are making a profit.

One of my friends had more than 10 credit cards with an outstanding balance of $230,000! She has now cut them all up (or had them taken from her) and her balance is down to $73,000, so she is doing her bit to help out.

Why wait? You could set up a split loan on your PPOR and use this as deposits and shortfall, for the new property. It would therefore cost you nothing out of pocket and you can still pay off the home loan as per normal. I see the only reason to wait if you think house prices in the area you want to buy to remain flat or drop further.

Sounds like a lot of hassle for little rewards to me. It can also be difficult to get finance for wraps.

What if it were to burn down and the seller's policy was not in place – you could lose everything. You may be able to sue the seller, but if they had no assets, then not much point.

Yep, CGT will apply because you can only class a place as your main residence, and therefore get the exemption, after having lived in it.

A person's main residence is exempt from CGT, with a few exemptions:- If it was used for income producing purposes- it is bigger than 2 hectaresThere are various factors which can determine if your place is your main residence, including- length of time lived there- whether all your family lives there- address of your mail, drivers licence,…[Read more]

a person's main residence is usually exempt from CGT, but to get the full exemption, the land size must be 2 hectares or less – I think approx 5 acres (my PPOR is 5 acres!). If the land is lager than this, then there may be partial exemptions available. eg. you can claim 2 H as your residence. You may also be able to choose which 2 H surrounding…[Read more]

Hi Rich MumRemember, Future loans needn't be with the same bank.Most charge fees for reviewing trust deeds – and then not even read the thing sometimes!. From memory, ANZ is one of the few that doesn't charge an extra fee for reviewing trust deeds.Just remember that nearly all lenders will require independent legal advice if there is a guarantee…[Read more]

Not really. The Buddy should ideally have no assets in his name. Being a direct is risky and giving personal guarantees can be risky if the project goes bad as they bank will come after his other assets, if he has any. However, someone has to guarantee the loan, or the lender will not give finance.

Good point Richard!

If you have a spouse, you could have turns owning the property. Spouses can only have one PPOR between them, but having different names on different houses helps you to stay under the radar of the ATO. Also consider the reason why you have to keep moving all the time!

Good point Richard!

Not really. The Buddy should ideally have no assets in his name. Being a direct is risky and giving personal guarantees can be risky if the project goes bad as they bank will come after his other assets, if he has any. However, someone has to guarantee the loan, or the lender will not give finance.

The ATO can say that you are carrying this on as a business and therefore ask you to pay CGT. depends on how you structure it.Also, CGT can apply to your PPOR if it is over 5 acres or if you have used your house for income producing purposes.

When you set up a company you just nominate how many shares there will be and who the owners will be.Its good to see you have a buddy to take all the risk for you! Does he or she realise they will be guaranteeing the loans? Its good for you if they do, as it will be risk free!

A trust is where someone owns something on behalf of someone else. usually with property, you or a company you control will own the property for a large class of beneficiaries. Income can be distributed to any number of these beneficiaries and this can result in reduced tax. There are also asset protection advantages as the legal owner of the…[Read more]

It depends on what fees you paid. Stamp duty is only claimable off the capital gain when you sell, same for solicitor costs. Other costs such as borrowing costs can be claimed, but over 5 years.