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try Mike at http://www.propertytaxsolutions.com.au in melb.
If you have made money you could sell and repeat the process and potentially make more (by getting more efficient). Next time consider using a company to hold the property perhaps.
Commercial loans can be done in individual names
If you are asking about ownership structure then seek specific legal advice as many issues consider. Transfer of title or declaration of trust will both attact duty and CGT to it pays to get advice.
As a general rule you should never pay a deposit on an investment property when you have non-deductible debt
Borrow against your main residence for the deposits
You should also try to shift the investment debt to owner occupied rates as well as investment debt generally has a higher rate.
Think of the sale of the main residence as a strategy too. It’s the only tax free appreciating asset that you can own so one strategy is to wait for some growth to kick in and then sell, tax free, and move into an investment property – which might have a small LVR by then, pay off the remaining loan and still have enough left over which you can store in offset accounts on the investments and slowly draw down on for some tax effective retirement.
There is a simple way to increase deductions and that would be to borrow 100% for the construction. wait till titles are separated, split the loan and then pay down the non-deductible portion.
There is plenty of information out there. Perhaps start off looking at the loans available to SMSFs. The number of lenders is dwindling and the ones that do lend are making the most out of it with high rates and fees.
Once the trustee has purchased property it cannot be leveraged against – the equity cannot be borrowed against so think of it has basically a one off purchase that you set and forget.
Also consider the estate planning aspects if a member dies and their death benefits need to be paid out that would probably mean the fund has to sell to get the cash to pay out the member, and this could be costly in the early years and/or if there is a decrease in value.
Best to talk to a lawyer – but no differences in duty between trustees and persons/companies.
But should you be putting the unit into trust? Possibly not.
This is something you need legal and tax advice on – and credit advice.
Once you decide you will need to consider structuring the company and trust and how to structure the funding of it. There are traps at every step along the way.
Any specific questions please list them here and i will answer.
This must be a victorian purchase?? Off the top of my head you would get the owner occupied rate if you intend to live in the property and actually live in it.
Fences are not deductible. This would be capital works, same with the paint. You could merely depreciate them at 2.5% pa over 40 years.
You will max out at some point. Generally where a borrower is a company and you give a guarantee if you go and apply to borrow again, if your own name or under another company, the loan you have guaranteed will count the same as if you were the borrower yourself.
There are limited lenders where guarantees may not be counted as debts, if the borrow can demonstrate they can pay the loan without help from the guarantor.
Speak to a lawyer about ownership structure and a broker about borrowing.
<div class=”d4p-bbt-quote-title”>ricky1990 wrote:</div>
Your friend can show that he lived there if he has some proofs such as records
statements, letters, etc… to that property instead of where they are actually living. Now they have all the “evidence” that they live in that house.
The ATO searches the rental bond register too – which would be evidence the house is rented out so the full main residence exemption would be llost – and you cannot use the 6 year rule when still living there and renting out part of the property
I know some real estate experts, one of them is Naval Aulakh. He’ll be the best person who can help you with your problem. Hope this helped!
Are you implying that the op should go to a real estate agent for tax advice?
Hello, If I sell my IP but I have never lived in it, is there anything I can do to demonstrate that I “lived” in the property within the 6 year window so I don’t have to pay CGT? Asking for a friend Thanks Bobby
The requirement is not ‘live’ but reside in it as your main residence.