Its hard to say.

You could for example pay 20% deposit on some land, borrow 80% and then get DA approvals etc for a project. Then you could borrow 100% of the rest if it all stacks up.

So if you had available equity of $160,000 you could buy some land of up to $640,000 approx.

Terryw
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With the same bank whether you have a 100% offset account makes no difference to the interest rate.

Many lenders do have no frills products with cheaper rates, but no offset. But these days most of the banks offer discounts on professional packages which brings the standard loans down to the same rate as the no frils, with all the added…[Read more]

You will need to pay CGT at market rates for the property, not transfer amount. So if the property has gone up in value, you could be liable not matter what you transfer it at.

Transfering it at a lower value could also affect the amount of money she could borrow. Lenders want to lend on the purchase price or the value, whichever is lower.

Also…[Read more]

Using a trust generally makes no difference at all to the ability to borrow. The only exception that I can think of is ANZ’s Low Doc loan which is not available to companies or trusts.

There can be some problems when using a Hybrid Trust. This would only arise if you have a corporate trustee as the title will be in the company name, but the loan…[Read more]

You can only borrow a certain % of a property’s value. Usually 80% without Mortgage Insurance. So you would have to work out like this:

Value x 80% less current loan = available equity.

The 80% could be changed up to 95% if you are prepared to pay LMI. In some cases you could even borrow 100% for investments.

Terryw
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Hi Opp

I agree that people need to verify things for themselves. So it is great when people can back up their argument with a useful refenece.

However, in the document you refer there is nothing on page 11 that refers to interest on funds borrowed for legas etc. Certainly legals are a capital expense and cannot be claimed against income (only…[Read more]

Well, there is not much to tell. Many lenders offer 100% offset accounts, so if your trust has borrowings, get an offset account and place all rents etc into this account and get the repayments etc direct debited.

The balance in the offset account will be offset against the loan. So if you have a $100,000 loan with $10,000 in the offset account,…[Read more]

Offset accounts are best, – these accounts need to be in the exact same name as the loan they are offset against.

Terryw
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Hi

whether or not there are expectations of CG not really relevant. You would want to reduce non deductible debt first. Even if that is gone, IO would mean lower repayments which in turn would mean you could invest in something extra.

I guess the only time yo would want to pay PI is if that would be your one and only investment ever. Even then…[Read more]

Originally posted by dacium:
Your account is correct.

Think of it this way, you cannot loan money to pay for rates and expect to claim that interest. You can see here http://www.ato.gov.au/individuals/content.asp?doc=/content/66031.htm&page=9&H9 the basic overview. You cannot claim interest on anything but the actual loan covering the cost of the…[Read more]

You could get around 75% of end valuation on a Low Doc basis. Would have to change lenders tho. Since you already own the land, you may not need any further funds.

Terryw
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You cannot normall force them to sell their share to you, or the sale of the whole thing. Do you have a joint purchaser’s agreement?

You probably need to speak to a soliticor, you may need are court order to force them to sell.

What about talking to ther person and trying to convince them to get out?

Terryw
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bypass the agent!!

Terryw
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I am not an accountant, but think that you can claim the interest on any borrowings relating to the IP, and that would include purchase costs.

Terryw
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Thats a tought one. If you sell now you will incur costs and may even make a loss. And once you sell that area may go up in value and you could be kicking yourself.

What area is it in?

Terryw
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I made a post here a few days ago, but looks like it didn’t get through.

NSW OSR’s take on trusts changed a few months after the PIT trust was released. I think they were marketing it as a way to reduce land tax, and I am not sure if this is still the case or not.

All discretionary trusts would get the 50% CGT discounts as the incomes are passed…[Read more]

I beleive if your trust is just involved with rental property, then there is no need to register for GST.

Terryw
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Or approach a bank in the country where the property is located.

Terryw
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And don’t forget, you could get a IO loan and pay extra like it was a PI loan, and then have the flexibility to stop the extra repayments at any point. You can’t do this the other way around.

Terryw
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A JP is just witnessing signatures. Which may not amount to much if your contract is fully of holes. (But you will be borrowing their money, so having a contract full of holes is their problem.)

A contract need not be in writing to be enforceable. But it is a good idea to avoid disputes later on. You will need to cover term, security, interest…[Read more]