I think it is fairly comon to move in early and rent the place – maybe under a license to occupy.

Valuers can only value as is. It the property has another potential use or redevelopment potential, then unless you have DA or plans and are applying for finance for the development, then it is not likely they will take this into…[Read more]

Hi Condog

I know there are various rules regarding losses – to try to stop people trading losses. But I have never heard that you cannot distribute income or capital to certain persons – unless your deed prohibits it. Distributions will vary from year to year as profits move up and down and some years the wife will have more than the husband and…[Read more]

Running costs of a trust are not expensive. Most accountants charge a fee for the return, which is not much. Your trust may have a lot of properties but, you would be paying your accountant to do the tax for these anyway if they are in your own name. So the only extra is the trust return.

Having a company as trustee will cost a bit extra per year…[Read more]

Just need to look for a valuer in the white pages/yellow pages and get them to do a valuation report – costs about $400.

Or you could get an agent to give an appraisal, and just be aware they sometimes exaggerate to try to get you to list it with them.

Terryw
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Terry@discoverhomeloans.com.au
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Was it the high court? I know the Federal Court determined that interests in a discretionary trust could constitute property. The case is Australian Securities and Investment Commission (ASIC) in the matter of Richstar Enterprises Pty Ltd.

The court was concerned with Carey controlling the trustee and its distributions. ie the role of…[Read more]

Look at discretionary trusts. These offer the most flexible way to distribute profit and save tax and also offer asset protection aspects.

Terryw
Discover Home Loans
Terry@discoverhomeloans.com.au
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On the title it is the trustee that is listed. The Trustee is the legal owner.

Terryw
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Terry@discoverhomeloans.com.au
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I think it works because the individual owns units in the trust and the trust is able to borrow to buy these units back. The trust can thus claim a deduction for the interest on this borrowing.

There is some dispute between accountants on whether the trust needs to buy the units back at market value or if it could buy them back at the same price…[Read more]

Hi Brc

Stamp duty is calculated on transfer price, but it must be paid at market rate. They may not pick it up, but if they do an audit, then you may need to justify your figure. Many often get a valuation for this purpose.
Gifting shouldn’t be a problem, but if the property is going to be rented out, then there will be problems with claiming the…[Read more]

You just need to approach it like a new purchase. Just speak to a solicitor who can arrange the legal paperwork, transfers etc. And also speak to your mortgage broker about if you could qualify for finance on your own.

Terryw
Discover Home Loans
Terry@discoverhomeloans.com.au
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If your bank is one that starts with “N”, then they seem to have a policy of trying to make every customer’s loan cross col with other loans. A former manager there told me this is policy, it helps the bank keep clients by making it hard for them to leave.

You can still have loans with the one bank and not have them crossed. You just have to…[Read more]

Sounds like you got them in a good month. They must have sped up their processing times!

Terryw
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Terry@discoverhomeloans.com.au
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Yes, you could have 2 loans, and an offset against one of these. Most lenders only allow one offset account.

Terryw
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Terry@discoverhomeloans.com.au
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Easy, avoid CBA!

Terryw
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Terry@discoverhomeloans.com.au
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Hi CJ

Yes, you can have a loan split loan with one being PI and one being IO. But each loan will need to be in both names. I am not sure how the ATO would consider things, but think each person would be half owner of each loan.

I think St G is one of the few banks that will allow different names of sub accounts on their portfolio…[Read more]

Some tax accountants are of the opinion that you can capitalise interest on an IP loan and then divert spare funds to pay down the home loan quicker. In Dec the ATO put out a ID saying capitalising interest was acceptable, but they withdrew it a few days later.

So it is unclear if this is acceptable at the moment.

Terryw
Discover Home…[Read more]

I would suggest similar, except a IO loan with a 100% offset. Saves teh same interest, but allows you to use the funds saved for whatevber purpose without tax implications.

Also I suggest you look into the 6 year rule. Move into the place briefly and establish it as your main residence. Then you may be able to avoid CGT when you…[Read more]

You can get 100% investment loans, so you may not need much equity – just enough to cover costs and Stamp Duty.

But it is a good diea to have between 5-20% plus another 5% costs.

A good strategy is to get access to the equity as another split loan and then to use this as deposit on a new proeprty, and keep the loans separate, avoiding cross…[Read more]

CT

The unit holder does not lend money to the trust, but buys the units.

There are various HDT deeds and various ideas by different accountants. Some require all the income to be distributed to teh unit holder (to justify the deductions) but others still allow the income to be distributed to the lowest income earner.

The trust doesn’t have to…[Read more]

Hi Barbara

Why were you recomended a LOC? If it is to access the equity on your investment property for further investments, then that is ok.

BUT if they want you to pay all of your income etc into the LOC secured against an investment property, then this would be absolutely dangerous!!!!!!

According to the ATO, Every cent that goes into the…[Read more]