Forum Replies Created
Ha ha – how can you rent to yourself?
If you are separating as in a relationship breakdown then there are stamp duty exemptions so you may be able to acquire this property if full. If you sell and buy another then you would be up for stamp duty again. Factor this in.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
sydneyinn wrote:Hi there, I just finished reading "0 to 130" and Steve says:"The way to get around your borrowing limit is once the ABC Bank has said 'no more', create a new trust structure and approach a different bank…"
i) Does this work?
ii) Is this easy to do?
iii) How much does it cost to start a trust?
I currently have one investment property under my personal name (in Sydney), which is almost paid off, and would like to invest in more properties via this method if possible.
Many thanks in advance.
Hi
I am a solicitor specialising in trusts and a mortgage broker as well.
My answers:
i) no
ii) no
iii) varies considerably. You could set one up yourself for free, or you could use a solicitor. I charge from $1100 to set up a trust with a consultation and written legal advice. You should seek specific legal advice as I have seen a lot of people stuff up trust set ups (including accountants) and this can cost a fortune to fix.Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Kade wrote:Yeah currently paying down some debt. My partner has a property which has 70k equity in it, but her name is not on the loan atm. We will be rectifying that soon so that we can use half the equity to get ourselves an investment property. I want to use a buyers advocate as i live in a mining town and its expensive to fly to check out places.Was thinking this leverage loan idea sounds like a good idea, was just after more info on it or well other perspectives.
If her name is not on the loan then it is probably not on the title – she is basically paying off a property owned by someone else. Take care.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
If you have non deductible debt you should pay this off first, so you set up a LOC on any property and borrow to pay investment expenses. It is pretty simple and straight forward
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Sounds like the standard strategy – see Jan somers books from 20 years ago.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Yes it could be done. This is what is called a 'wrap'. Title would remain in your name until they are able to get conventional finance and pay your out.
Read your loan agreement though as you may need to get the lender's permission.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
I can think of 2 lenders that would do a discharged bankrupt after 2 years – should be possible i think.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
jussin wrote:Hello all! i am seeking some advice or knowledge please. Currently i own a 50% share of a property with my mother who owns the other 50%. I am looking to take 100% of the title and another investor i spoke to a while ago mentioned that the government will sometimes waive if not minimise the amount of stamp duty payable on this sort of transfer due to the circumstances between family members. Does anyone have any knowledge on this sort of scenario or able to point m in the right direction to find out? Regards JustinUnlikely. This is a dutiable transaction with duty payable on the value of the property transferred. Duty would be payable in NSW.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Pay cash for the house and then borrow against it to buy the IP.
Also consider asset protection strategy or 2.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
wilko1 wrote:Just reading it my first thought iswhy do you have a mortgage on the property that you are living in ? and why do you have no mortgage on the investment property ?
I think you should swap your loans around because as catalyst was talking about there is non deductible debt. and dedeuctible debt
That means that the interest you are paying on your current PPOR (Principle place of residence) is Non tax deductible against your current incomes and rental income of the other property…
I would ask the financial planner if only for this one piece of advice. That you should take out a mortgage against the investment property. and you should repay your homeloan debt on your current PPOR.
You would save thousands in tax, depending on the values and how much debt you have on your current 2 year old ppor in brighton it could be 10s of thousands.
Contrary to a fundamental tax law. Not deductible.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Consider also estate planning and ownership structures – sole, joint tenants, tenants in common, trusts, companies SMSF etc. Consider what ifs:
death, incapacity, bankruptcy etc
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Freckle wrote:cbarry wrote:my broker told me to stop over analysing everything and just simply buy something.Get another broker. That one isn't worth 2 bob.
A good broker does more than just get you the finance. They help you understand and analyse the deal. They should also help you refine your investing strategy that enables you to be properly structured for future growth/investing opportunities. You reconfirm that advice/info with your accountant and at a deeper level.
Just simply buy something doesn't cut it.
Or maybe that is something that a sales person says – to talk you into something that will make them a commission.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
cbarry wrote:Hi Freckle,I was under the impression a mortgage broker only looks after getting finance for you. My broker said she isn't there to offer me financial advice! I thought they were separate?
Yes, they are separate. However some brokers are also licensed financial planners, and/or solicitors, and tax advisors as well.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
1. yes
2. yes
3. no, income tax
Options would be better, but also CGT or income tax on the assignment and stamp duty on the value of the option – recent changes or soon changes in NSW so you may have to pay stamp duty on value of the property.
a. not really
b. not in nsw
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
What do you need advice on? Consider structuring and tax and a few asset protection strategies as well.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
There is no one right strategy. You need to think which will make you the most money – factoring in potential capital gains
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
fredo_4305 wrote:Hi Guys. Property is in QLD. I can see its likely ill be required to pay both again. I think its BS and money grabbing as its only removal of a name. But thats life I guess.Not merely removal of a name – changing of legal ownership. Not much of a bigger change than this.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Generally treated the same for tax reasons. But succession is the main one to consider.
eg. if TIC you may leave your share to a testamentary discretionary trust so as to take advantage of extra tax benefits for children, general tax streaming benefits and asset protection. you may get the will drafted so that there is the option to take a property directly too.
That is good tax planning, but there are reasons to have JT – e.g. if you have a family member who you expect to challenge the will under Family Provision or otherwise. By the property not forming part of your will there is less chance it will be caught up in this – Note NSW is the exception.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Actually, if paying cash you may want to consider setting up a fixed unit trust to own the property and the SMSF to own the units. This may introduce some flexibility later….
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
I am pretty sure every state would have stamp duty exemptions for the break down of a relationship. NSW does.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
