Good point CRJ and these costs will add up over time.

I am a lawyer specialising in asset protection. I have half finished a book on the topic and am still finding out new things each day it is a very complex topic.

It is not as simple as setting up a discretionary trust. It is important how the trust is set up – who takes what roles, the terms of the trust – some ways to set up will achieve little…[Read more]

if you sold it within 6 years of moving out then yes it could be exempt. But your new one will be subject to CGT.

Land tax is a whole different situation. A house could be you main residence for CGT purposes (commonwealth law) but not for land tax purposes (state law) or vice versa.

1. once it is available for rent
2. depends. You will only be able to claim one of the houses as the main residence and get the exemption. So you would generally reassess things in a few years and see which one has grown the most.

Thats why you need specific advice, because you are only giving part of the story and these things are important. If you had legally borrowed from someone else first you could have set it up in such a way as to maximise tax deductions going forward, but you may have ruined your chances now.

1, no
2. s118-145 yes, s118-140 only applies if selling
3. live in one

I answered this above.

You need tax and legal advice as well as credit advice.

Using cash to invest has tax issues. can you borrow the lot without using cash?

If the cash is in the offset account on your main residence then when you withdraw it the interest payable will increase but this interest won’t be deductible.

Putting your money in someone else’s bank…[Read more]

I didn’t doubt the story was true. I just doubt the benefit. Not my cup of tea

It would be in the lenders best interest to take as much security as possible from the client and to also tie them up making it more difficult to refinance and leave the bank.

For the client though it would be in their best interest to avoid giving too much security and to being tied up.

Part IVA of the 1936 ITAA would deny any deductions, but legally you could rent to him.

There are tax issues.

There is no issue with gifting money, but if you are not charging rent then you will not be able to claim any deductions on that property at all. If you charge peppercorn rent your deductions would be limited to the amount or rent charged.

A way around all this may be to gift your friend money and have him pay market rent.…[Read more]

Debt recycling will be slow. Buying another property to sell at a later date may enable you to pay off the PPOR sooner. And you can do both buy and recycle.

Best not to use a LOC for the construction, but a standard loan, interest only. With a LOC you run the risk of money going in and out of the loan. The rate will also be higher and it will be at call.

Yes you could ‘lend’ them the shortfall and you could secure your loan by a second mortgage. They would need permission from their lender to do this as title would change at settlement. It might be easier, for them, if you secured this against their other property – better for you against both of their properties.

Make sure you seek legal advice.

Thanks TheNewGuy

I cannot find any records of that unit.

Most recent sale in the building, from what I can find, is unit 41 for $55k in Oct 15.
Unit 114 for $44,240 in Sept 15
Unit 111 for $34,000 in Sept 15.
Unit 103 for $23,000 in Apr 15.

Pity the link in the first post doesn’t work anymore as if we had the address we could have done an RP data search.