It can be done but the hotel cannot he used a security.

Why would you want to go to them?

A trust is treated as a separate entity for tax purposes so if there is a loss within the trust this will not affect your personal income. But a trust can negative gear like a person can. i.e. a loss from investing in property within a trust can offset other income of the trust – or another trust which could distribute to the loss making trust.

a few of my clients have done this. Buy a house with a large block of land. Split the land so that they end up with one empty block and one smaller block with the original house. One guy got the original house valued at almost the same as his purchase price meaning he basically got the block of land for free. He will sell the new empty block and pay out the portion of the loan attributed to this land, then reborrow up to 80% and repeat.

That is a large sum of money. You should consider some asset protection and tax strategies.

Also the offset account is worth having, especially on the PPOR.

Thats a large weekly shortfall.

Will be interesting to see how this pans out.

No, but I was just wondering which country it is in as you didn’t specify.

S32 only applies in VIC.

Yes. You will need a valid contract of sale at the time of the option. You need to know what you are agreeing to when the time comes to exercise.

Only lawyers can give legal advice.

You forgot to mention lawyers – A trust is nothing but a bunch of legal obligations.

Seems like you are only considering income tax. What about land tax, asset protection, estate planning, succession issues etc.

Trusts generally do not pay tax, but the money flows through to one or more beneficiaries who then pay tax on this income. You could use a company as a beneficiary to cap the tax at 30%. But there are many other things to consider, some financial, some legal, and some strategies.

I would be surprised that something off the plan will put so much money into your pocket on 100% borrowings or even 95%.