i would only use a LOC secured on your current house and then use this as deposits with the main loans for each new property being IO loans.

With that approach all the securities would be cross collateralised which is not good.

Hi Paul

Excellent answer from Tony Cordato.

I suppose you could also fax is a discharge request with a settlement date of 14 June 2042.

One idea (or 2) behind using IO is to use as little cash as possible for investments so that:

1. You can pay off your own home sooner, and/or

2. Invest in more properties.

Have yous considered  if you dont fix and prepay again next june you will have a higher tax bill next year. ie you will have rental income but not much in deductions.

Also most are suggesting rates may fall again in the near future.

Its probably CGT exempt then.

Did you have another residence at the same time as this one?

Thats ok, thanks for the info.

Thanks Kate

Doesn't really make sense to me.

The trust may have an interest in the property but what happens if the property grows in value.

eg.

$100,000 property
$80,000 loan with Bank west
$20,000 interest via the trust having an equitable claim – not sure what
You may be able to say the person owns 80% and the trust 20%

After 10 years,
$200,000 property

Person 'owns' $160,000 less the $80,000 = $80,000
Trust 'owns' $40,000

If person goes bankrupt the trustee in bankruptcy will come in and take over the property (standing in the shoes of the person). The trust may have its position secured by registering its interest which may be a higher interest than the creditors. Bank will be first in line.

But the $80,000 equity will be exposed and when the trustee in bankruptcy sells the property this (minus there $79,000 fees) will go to creditors.

Also for that to be effective the trust would have to do something for its interest, such as injecting money.

Austlii is the most common website used by lawyers to check legislation. It may not be 100% as up to date as the commonwealth Govt one but it is much easier to use.

In this instance it is up to date and contains the same wording as the one you linked to, which wasn't the actual Regulation, but the update to it.

Now I get what you are saying: Govt is unjustly excluding "break fees" from the definition of "exit fees".

Hi

Refinancing won't affect deductibility, increasing the loan won't either unless the extra borrowed is invested.

New tax free thresholds mean you can each earn about $20,400 next financial year and pay no tax.

Can't comment on the proposed fraud aspects!

Look at the 6 year rule under s118-145 ITAA 97 which will allow you to rent out the property without losing the CGT exemption – in some circumstances.