What title the property is shouldn't affect whether there is gst.

I don't think selling a property so as to buy 'positive cashlow' property is a good idea.

Think about which will give the greatest return. If this one is a dud then it may be best to sell but do the sums first.

It could be that your property will be exempt from CGT because it could be still classed as your main residence. But it could also end up as a loss if it is a dud property. In that case it would be better not to claim the exemption

Not sure when I am going yet. I am staying in Thailand now, and may wait till golden week is over.

You've got to find someone before you can get money from them.

You could employ a private investigator and/or do what you can yourself. Your tenant application may have some leads and then there is facebook etc. If you have their bank details you could get an order to garnish their accounts – if they have money in them. Might be best to watch and wait and let them get back on their feet and then try.

There is a lot <moderator: delete language> out there about asset protection etc.

What you need to consider is what if xx happens and follow through.

eg. What if you set up using a discretionary trust with a company as trustee.

A tenant gets injured and sues the owner – the $2 company has no assets but the assets of the trust could be at risk. Generally the people behing the company are safe. Directors are more at risk, but shareholders of a company can only lose the value of their shares. But if a director of the company knew there was an electrical fault and didn't repair it or take any action then they could be personally at risk. So their personal assets will be available to creditors. If the house is owned jointly then this would be only their share – generally.

So this is a good reason to use a company as trustee and to have one director.

But if you were to set up that structure and then be unable to meet the repayments for whatever reason then the bank will call on the personal guarantee that they would have required at the loan application stage. So if you both give personal guarantees then your personal house would be at risk. If one gave a guarantee then that person's share.

But the bank would sell the property first, probably, and then come after the guarantors for any shortfall. Hopefully this wouldn't be too much, but it can add up with the bank's legal fees.

Now think 20 years ahead. You have set up the above structure an have $10mil in equity and you decide to open a business. You use a company for limited liability reasons which is great, but when you lease a shop the landlord wants a personal guarantee. Your business goes under and the rent for the next 5 years is still owed. You could lose your house over this. But generally assets held in the discretionary trust could be safe from creditors (there are many ways this culd be attacked though).. So allthough one of you may go bankrupt the assets could still be controlled in a trust and you could keep going.

Hi Guys

I am heading to Osaka next week. If you will be in town let me know. Prob won't get to kyushu though.

no, i am a lawyer with an interest in tax.

Or tell the neighbour that you can forward their email onto the tenant if they wish.

Buy a property for tax reasons is not a good way to proceed. You should be buying if it is a good investment and taking into account any tax isues as well.

Whether you should use cash or borrow also depends on a number of factors – not just tax. One consideration is if you use cash you would be saving 6.5% in interest you would have been paying to the bank if you borrowed – so by keeping your cash can you get a better return than this?

A trust is a legal arrangement best done by a person who knows what they are doing – lawyer and/or accountant. Lawyer better really as there are a host of legal issues, but you may need some tax advice too.