Thanks DIY

In that case, Casper could move out of the existing house and rent it without CGT consequences. He could then buy another house to live in and this could be classed as his main residence.

Using the tax rules to your advantage, he could buy a new place, move in briefly, establish it as his main residence and then move back to the old…[Read more]

What you could do is live in the property initially, then your friend could rent it from you. You can then claim the expenses against your income, ie negative gear, and you may be able to keep it CGT free under s118-145 of the Income Tax Assessment Act.

Terryw
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Terry@discoverhomeloans.com.au
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This is a complex area of tax. If they are subdividing their main residence, then there may be CGT when they sell it to you. Or gift it; stamp duty and CGT is calculated at market rates. I am not sure if there is a way around it, but there may be if the purchased the land prior to the introduction of CGT.

It may also be better if they just keep…[Read more]

Yes. Because once you pay down a loan, if you redraw the money this is considered new borrowings and the deductibility of interest will depend on what you use the money for.

eg. You want to use the funds for a deposit on your own home.

And if you have no PPOR, why not move into your rental property intitially and take advantage of the tax laws…[Read more]

NO, I don’t think you can claim costs such as these up front before you have settled. They can be claimed later if you ever sell the property. Check with your accountant.

If you are using a trust or are in the business of property investing, it may be a different story.

Terryw
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Terry@discoverhomeloans.com.au
Send an email to…[Read more]

Hi
Do you have a loan on your own home? If so, all spare cash should be going onto that loan.

If not, then I would be inclined to borrow as much as possible and put any spare cash in a 100% offset account. You will get the same savings without the adverse tax consequences of paying down a loan.

Terryw
Discover Home…[Read more]

Dacium

Never?

What about if someone were to live in their rental property briefly, then rent it out and they rented somewhere else. They could claim the CGT exemption and still get the tax benefits of negative gearing their main residence while paying lower rent. In my calculations this person would be ahead in early years. Later on as rents…[Read more]

Contact the Tenant’s Union NSW
http://www.tenants.org.au/

Terryw
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Originally posted by thai:
I would like to clarify “other beneficaries” as being family members.

Hi Thai

Not sure what you mean here?

The beneficiaries of a trust usually include the principle’s extended family members include those yet to be born or yet to be married into the family, other companies and trusts which you are involved in…[Read more]

You can onsell the place like a normal sale. But I beleive the vendor must allow this in their contract with you.

Settlement cannot occur until the place is complete, so your deposit will be tied up, and the deposit you receive will also be tied up until then. Also, the profit will be tied up too.

Think of the risks involved such as the property…[Read more]

Originally posted by thai:
I have another question and sorry for rambling.
If the unit holders in the future decides to sell back the units to the trust.
Would the unit be sold at the same price?
If there was CG in the IPs can the trust distibute the funds to other beneficaries or only to the initial unit holders.?

That is another area of…[Read more]

Hi Thai

With a HDT, it is the trustee that owns the property. The unit holders own units in the trust. If the unit holders borrow to buy their units, they may be able to claim the interest on their personal income. But it seems this is rather uncertain at the moment.

I think the unit holders will be able to claim the whole of the interest…[Read more]

There are a whole range of concessions available for businesses on their sale. Its not something I have looked into, but there is a lot of info out there. Do a search on “small business concessions” and that may pull up something.

Terryw
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Terry@discoverhomeloans.com.au
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Trusts usually have a clause in the deed about which state laws they are governed by. I am looking at a deed now and it he governing law depends upon which state the trustee resides in, or where its registered office is (if company). Other deeds specifically name the state.

Other issues are stamp duty. Most states charge $200 stamp duty on the…[Read more]

I haven’t heard of it either cannot see how you could pay off your mortgage without paying any extra.

Terryw
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Terry@discoverhomeloans.com.au
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I am in Sydney too.

Terryw
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Terry@discoverhomeloans.com.au
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Generally I would suggest people look at a trust to buy investment properties.

Downsides are:
– Maybe a bit more in land tax
– Discretionary Trusts cannot distribute losses, so no negative gearing benefits

But there may be a way around the negative gearing aspect by using a hybrid Discretionary Trust and borrowing to buy the units in the trust.…[Read more]

I think the best way forward may depend on what you are currently using the LOC for. If you have having your wage etc put in, then you probably should not use it for investments.

If you just have it sitting there, or have only used it for investments, then you could just take the deposits from this LOC and borrow the remainder, 80%, from another…[Read more]

Setup time;
5 min on the net to 1 week or so with an accountant.

Cost
Accountants generally charge around $1200+ for the trust deed. I don’t know of any solicitors selling trusts, especially HDT with the tax knowledge required.

Other
Bit of advice is usually included in the accountant’s fee, as is ABN, TFN applications etc. add $200 for stamp…[Read more]

Hi Dude

What is a FICO score?

Terryw
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