THis is a 7% return which is not much more than a standard property. But with this you will have many more expenses and much more risk and complications.

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Hi

Sorry Skippy, I missed that bit about the land.

I think Pud’s idea is great. Get the person just to borrow against the land, that way they get the best of both worlds – ie money now and get to keep the appreciating asset.

Terryw
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Yes, Westpac are funny about trusts. Try virtually any other lender.

Also be aware that your broker will probably have to give back his commission (actually it will be taken back!) if you discharge the loan within 3 months.

Terryw
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Good advice Fern

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Richard

You’re right. Anyone purchasing via an option or installment contract would have an equitable interest in the property and therefore be entitled to lodge a caveat.

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Another point.

You should talk to someone at Centrelink itself. They have ‘financial advisors’ there who can help.

Also, for a recent legal case at the NSW supreme Court involving a life tenancy see Phillips v Hunt [2005] NSWSC 978:
http://caselaw.lawlink.nsw.gov.au/isysquery/irl80b9/1/doc

Terryw
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If it is life tenancy, then i beleive, they are not the owner of the property. The property is owned by a trust and they are a beneficiary and have no right to sell or mortgage the property.

Apparently leaving a life tenancy was common many yers ago, but doesn’t happen these days – or shouldn’t. Courts are aware of the hardships that life tenancy…[Read more]

Gross.

Can usually caveat, if the contract allows it. But this will not prevent the property being repossessed by the lender if the wrapper fails to pay.

Terryw
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From Today’s SMH:

Virgin Islands stalls tax haven planTHE Tax Office’s campaign to find out about tax haven dealings has stalled because the British Virgin Islands refused at the last minute to sign an information exchange…[Read more]

Yes, very high risk. Why can’t they get normal finance?

Check out the LVRs. What other assets do they own? If something goes wrong, you will need to start legal proceedings to get your money back. If not equity or other assets, then you could be in trouble.

Terryw
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Some good critisims there!

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I found the book on sale ($2) about 6 months ago, and it has sat on my self since then. I’ve just started reading it, and it is not bad so far.

Terryw
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You may lose all or part of your CGT exemption if you are creating an income from the property while living in it. I beleive the 6 year rule cannot apply in this situation.

Please speak to a good accountant before you do anything.

Terryw
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Yes it may be possible, depending on your income etc.

You could reduce your repayments by one or more of the following:
– increasing your loan term
– changing to IO
– finding a cheaper interest rate

Terryw
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These days No Doc type loans are available at 70% LVR. This would be the easy option for you.

Terryw
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Here are 4 Taxpayer Alerts:

TA 2005/5
Use of an outbound offshore re-invoicing arrangement to avoid or evade Australian tax

TA 2005/6
Use of an inbound offshore re-invoicing arrangement to avoid or evade Australian tax

TA 2005/8
Asset transfer to an offshore structure at below market value with subsequent use to produce income not attributed to…[Read more]

Carl

Let us know if they get back to you.

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It is still possible to find cashflow +ve property in major cities. In the past few years at least 2 of my clients have found them in Sydney.

I would be very wary of buying in ‘bad’ areas just because they are cashflow positive.

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I have spoken to a few lenders about this before. Bankwest, Adelaide Bank and Liberty Finance are some that have indicated they will look at these sorts of deals.

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Hi Carl

My non accounting opinion is that capital losses can be carried forward until offset by a capital gain. I don’t think there is a time limit.

However, for a trust to carry forward a loss various requirements must be met before the loss can be claimed.

You must look into the trustee making a Family Trust Election. see…[Read more]