Joe – loan 2 would be secured by the PPOR.

Do not redraw funds and place into an offset as they will not longer be borrowed funds.

an offset account is a savings account and not a loan so your loan balance will not change if you withdraw money/. No effect on LMI.

Even if you pay the loan down and use redraw (not a good idea usually) then this won’t effect LMI at all either.

You will only incur LMI if you borrow more than the original amount and the LVR is more than 80%>

Seek legal advice before contacting as extra risks from creditors.

A development involves making something and selling it. properties in this case. Similar to a gadget maker making something to sell – trading stock and/or income tax. Capital gains tax applies to certain assets that are bought to hold longer term with the aim of producing an income from the property and the later sale being incidental.

Her debt is not your debt, so you would not be assessed on it unless you go on the loan too or guarantee the loan.

Most lenders base your expenses on your status – married/single plus dependants etc.

Yes totally normal and a strategy that I recommend. But get legal advice – what if she/he dies and leaves the property to her mother, what if she…[Read more]

prob not. many issues involved. GST?

Good point, but this isn’t necessarily the case. It would all depend on a number of factors s79.

virtually all lenders lend to trusts.

only on special 1 year fixed loans. Variable – the amount of interest is not certain.

Yes. prepaying means paying in advance. The loan will be fixed for the next 12 months so no payments will be due until the expiry of the 12 months.

1. yes
2. yes
3. still subject to Australian tax laws. e.g. no CGT in NZ, but as you are a resident here disposal of a NZ property would result in CGT here.

Do you have a main residence? If so then I would pay this off. If not then I would buy one. You can then leverage off that.

Get some legal advice on structuring things for tax effeciency and also asset protection.

You can make a declaration that you now own the shares as trustee of the existing trust.

If the SMSF purchased the unit outright it would be using up its cash so may not be able to afford a second unit withtout further extra contributions.

Why would you want to buy a small unit? Do you think this would be a good investment? How small are we talking?

$120k is not much capital to start with. Is the SMSF already set up?

Are you looking to buy in the SMSF or in your own names?

If a SMSF it may not be a good idea to buy without finance as the property cannot be later mortgaged or used as security for further investing.

I presume the apartment is small – is that why you cannot finance?

You cannot contract with yourself so you would have to make a declaration of trust. Shares – need to pay duty in some states. If the trust owns property in QLD could be a lot of duty.

Sounds like you are not really getting instant equity if you cannot resell it qiickly. think carefully.

You have a LVR of less than 50%. So just set up a new split secured on the old PPOR and use this for the shortfall of the new PPOR – make sure you don’t incur any LMI as there should be no need for it and it won’t be deductible. Also note that the interest on this new split won’t be deductible because the money is being used to fund the new PPOR>

Assuming you will need a loan on the property why not use the lenders valuation