If you are entering a partnership, then there are many ways to structure it such as Unit trusts, Discreationary trusts, company, or individual names. You should talk to an advisor on this to be sure on the best one. You may even need a partnership agreement to make sure everything is covered.

You do not need to set up any structures, but it would…[Read more]

Why purchase in your own name if you are going to just transfer to a trust. You may save $7000 by getting the FHOG, but it could cost you more in stamp duty and legals to transfer it.

Also by living in it you get a CGT exemption if you ever sell. You could rent it from your trust, but must pay market rent. This will mean after a few years the…[Read more]

1. Setting up companies and trusts will not affect your borrowing capacity as you will be required to personally guarrantee the loans. So the banks will assess the deal on your personal income. There is no difficulty in borrowing using a brand new trust or company structure.

2. There would be not advantage, from a borrowing point of view, in…[Read more]

Dunno. But there is a tax ruling which states you can count two places as your main residence, for tax purposes, for a max of 6 months.

If you are constructing a dwelling, there may be additional rules.

Terryw
Discover Home Loans
North Sydney
terry@discoverhomeloans.com.au

Banderos

I can see nothing wrong with trying to minimise tax. I do not think you would be queried on your purpose in setting up a trust – it is done every day of the week.

But I am not an accountant!

Terryw
Discover Home Loans
North Sydney
terry@discoverhomeloans.com.au

Yes, I would suggest you get professional advice. But you have to decide what you are going to do with it. There may be advantages in buying it in you individual names if you intend to live in it for a while (CGT savings). But if you have other plans, then probably a trust is better – and you need to determine which type is best.

Terryw
Discover…[Read more]

If you are applying for a full doc loan, then you would need to show full tax returns for the trust and Profit and Loss statements. If you guarrantee the loan – which you would have to do in any case, the bank may still want to see the icome statements for the trust if you are relying on this income to service.

Terryw
Discover Home Loans
North…[Read more]

Get your solicitor to look at the contract – there may be a way around it.

I suppose you could sell an option on the house, but getting them to fund the construction would be very hard.

You may or may not be able to wrap it (is sell on installments), but it would be very hard for a wrappee to fund the construction as they couldn’t borrow the…[Read more]

Terry

I think Aussies would have to pay tax in Australia on income earned in NZ. So even tho there is no CGT in NZ, they will have to pay CGT in Australia on any gain. Hence the benefits of a trust – to reduce tax.

But I am not an accountant so may be wrong.

Terryw
Discover Home Loans
North Sydney
terry@discoverhomeloans.com.au

Gorvis. Sorry, can’t answer that one. It is not actually a legal document until stamped, so that is probably why??

Terryw
Discover Home Loans
North Sydney
terry@discoverhomeloans.com.au

That’s just the way it is. The govt likes to collect revenue and this is just another avenue. The stamp duty cost for a trust is $200 in NSW.

Terryw
Discover Home Loans
North Sydney
terry@discoverhomeloans.com.au

Originally posted by AusProp:

I’ll need to get hold of the legislation and read it as it coud be an interesting strategy.

Hi John

Look at Sect 118-145 of the ITAA.
Also see TD 51 and TD 95/9.

Terryw
Discover Home Loans
North Sydney
terry@discoverhomeloans.com.au

I have a copy of the old kit. It has a some victoria specific information, but generally the concepts will be the same in every state. You will have to get your own contracts drawn up anyway.

Terryw
Discover Home Loans
North Sydney
terry@discoverhomeloans.com.au

John

The legislation says nothing about having to move interstate or job transfers etc (nor does the link you provided). As far as I am aware, you could move next door and still claim the exemption.

Terryw
Discover Home Loans
North Sydney
terry@discoverhomeloans.com.au

I am not actually sure, but after reading Richard’s comments, think it would be the original contract date, 12 June 2004 in your example.

You should be able to find something on the ATO site to confirm, or give them a call.

Terryw
Discover Home Loans
North Sydney
terry@discoverhomeloans.com.au

Sonja

Did you live in this IP at any time? If so, you may be exempt from CGT altogether. agents fees are around 2 – 2.5% and legal etc should be under $1000.

Terryw
Discover Home Loans
North Sydney
terry@discoverhomeloans.com.au

It is also possible the vendor will just let you out of the contract.

Terryw
Discover Home Loans
North Sydney
terry@discoverhomeloans.com.au

If this is your ONLY property, you could probably claim it as your PPOR and pay no CGT.

Terryw
Discover Home Loans
North Sydney
terry@discoverhomeloans.com.au

TMA

You can also do that with a trust. There is actually a tax ruling on it when done using a unit trust (ie they don’t like it!).

I think Derek is right about the CGT issue. Pre 1985 properties will be CGT exempt no matter what – so you may still be able to class another as your main residence as well.

Terryw
Discover Home Loans
North…[Read more]

I did something similar too. Did you know you get get the best of both worlds? ie rent out your PPOR, claim deductions and rent somewhere else(which would be cheaper) and still claim the PPOR CGT exemption for up to 6 years.

Terryw
Discover Home Loans
North Sydney
terry@discoverhomeloans.com.au