Forum Replies Created
You don’t give enough details to make an assessment, but
1. Paying down a loan will result in tax complications if you need to use this money back later.
2. Ideally borrow to buy income producing investments and keep your cash for personal expenses.
3. What did you do with the extra money borrowed? There could be complications resulting from this.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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Get valuation at date of moving out and this will be the cost base – roughly speaking.
Also have the option for keeping it CGT free for up to 6 years s118-145 ITAA 97
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
Do you own your parent's property?
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 paid off your PPOR then why not consider a trust structure?
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
Rickduff wrote:Hello everyone.I have a question about how to increase your borrowing capacity?
I currently have a PPOR with my partner that we paid $295,000 for in September 2012 which is in both of our names.
I am saving a cash deposit for an investment property which I hope to get mid to end of 2014.
My income is $90,000 PA and my partners is $50,000.
I am looking at putting the investment property and any other future properties into a family trust for asset protection and to save tax on rental income.
I am also thinking of transferring our PPOR to my partners name to free up my full income to buy IPs although I will probably have to go guarantor anyway.
If we go ahead and get the IPs, then combined with our PPOR does this mean we will be capped out on borrowing power? Will be putting a 10% deposit down on the IPs for around $250-300,00 and paying costs with cash.
Any advice is appreciated.
Cheers
Rick
Get some legal advice on the implications of transferring your share of the house to your spouse – stamp duty, asset protection, succession, control etc. And then get some legal advice on the trust side of things too. A trust set up wrong will provide little protection.
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
Get person A to ask person B to hold property for person C!
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 agree – trusts don't help you borrow more!
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
This is a legal question. There are a couple of ways to do this, but far reaching consequences.
First off – Why do you want to do 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
You might want to consider going for as high an LVR as possible and then parking the cash of the SMSF in a 100% offset account attached to the loan. This will save the SMSF interest and keep the funds available. With SMSFs once you pay a loan down you cannot reborrow it.
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 may be possible – but do you have the cash to build?
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
Josh/Joah
You might want to consider a unit trust or a company, depending on the circumstances – or maybe own names.
Whichever way you should have some written agreement – shareholders agreement, unit holders agreement or just a joint purchasers agreement. This should cover as many what ifs as you can think of – what if he wants out and you cannot afford to buy his share for example.
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
How do you know you have considered 'all the risks'?
What about
death
incapacity
divorce
insolvency
efftects on future borrowings
guaranteeing loans
director duties under the corporations act and common law
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
Best to seek legal advice – from a lawyer – as there are many issues related to this.
Then talk to a broker about the lending issues – the effect on borrowing capacity 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
try MIchael at http://www.houseofwealth.com.au
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
This bit made me smile.
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
bort wrote:so does that mean i can originally claim residence and put power on for only one month before renting it out for six years without losing any CG when it comes time of sale?No.
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
Don't forget you must establish it as your main residence first for this to work (s118-145 ITAA97). Merely putting power on may not be enough.
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
Bruce from Brisy wrote:Hi Greg would you be able to comment on my last post please…..So in summary if I have it correct – if I take out a CALL Option on a Qld domestic dwelling for say 12 months with 2 x 6 month extensions written into option – and on sell CALL option to an ultimate buyer or nominee – I only pay the CALL option fee (negotiable with seller) let's say non-refundable for the moment. The ultimate buyer pays stamp duty on property once he/she gives a notice to purchase to seller accompanied with a sales contract to seller thought Real Estate agent nominated by seller. I also place a CAVEAT on property when taking out the CALL Option to protect my interest in property. So what are the out of pocket expenses with this deal for me. Call Option fee let's say $1000, Caveat registration with Titles office – I think less than $200 in Qld, Do you have to notify local Council let's say Brisbane City Council that you have taken a Call option and Caveat on property? When exchanging Copies of CALL Option do you need a solicitor and if so what are the fees for administrating CALL option contract? I have a CALL options contract and is ready for use. Therefore no expense for Call Options preparation. Have a copy from a bootcamp I did recently. Although we didn't go into it in great detail for out of pocket expenses. What are the calculations for determining a CALL Option value? Is it a % of realised profit in deal that is: demo existing house and build 3 units with a realised profit of say $340K. Is 10% of that gross profit a starting point? Any help anyone can advise me on this subject would be appreciated. Thanks Bruce
Bruce – are you going to enter into an options agreement without legal advice? Very dangerous.
I have a client now who has sold an option to someone and they have stuffed up – he is able to get out of the deal because of this mistake in drafting.
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
try http://www.houseofwealth.com.au
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, you would need to convey the title to one name.
Costs
– tax advice
– legal advice
– conveyancing
– loan discharge
– new loan
– new LMI possibly
– CGT possibly
– stamp duty
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
