There might be a will in place, what do you know what it says? Wills can be revocked by marriage or by doing  a new one and he can make a claim no matter what is in the will. It would go to court if he challenged it but you can always negotiate out of court. But lawyers would be involved and it could be costly. I was one a similar case a while back and the fees were up to $150k. The risk of him challenging the will can be reduced by talking to him about it beforehand – I mean your mum. And by leaving him something. Some people get a big shock when they find they have nothing in a will. He may also predecease your mum.

By transferring the house to your brother it is adding to the risk in one way. You will have to contend with him getting sued – bankruptcy and family law and if he dies. But you also have the issues with your mum – if she goes bankrupt you have the claw back provisions and then the family law and claims on the will.

I think it is more like 24 months for a property settlement with family law matters. ie defacto cannot claim within 24 months. But this can be varied by the court – i think, going from memory.

stamp duty would be payable.

Best to talk to a solicitor such as myself.

Transferring assets quickly may give some protection. Especially within the first 2 years. But the family court has wide powers over third parties and your mum would be transferring property with the intent to defeat a claim on it. So if he were later to challenge the transfer it would be weak and he may have a claim. The family act enables orders to be made on third parties such as yourself.

But, even if he did challenge it the court will look at a number of things such as property of the marriage, contributions to the property and then the needs of both parties.

Trasnferring will help your mum a bit, but what if you enter a relationship? Or get sued?

yes there is.

1
Profit = Income – expenses
If this is negative then you are negative cashflow before tax and you would be negatively geared.

2
Profit = Income – expenses – non cash expenses.
(non cash = things you don't pay for directly, but can claim such as depreciation and loan costs)
If this figure is negative then you are negatively geared.

You could still be cashflow positive with negatively geared because of the non cash deductions

3
Profit = Income – expenses – noncash expenses + tax saved (related to this property only)
This will tell you how much it actually makes or loses after everything.

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You cannot just add your tax return to the figures because some of that return is because you were having too much tax taken out of wages each week and you would also have other non property related expenses that you can claim related to your job.

Don't forget NAB is still one of the lowest rates and they dropped their rates more than the other banks last time.

I haven't done the calcs and wasn't even referring about rate etc. Just that this is an option.

Also if considering fixing have you considered the RBA could drop rates again within a year?

What about staying as is and just paying  extra off each week via direct salary deposit?

I have some exams for a masters degree over the next week, but can catch up after that. Can you send me a PM or email via the forum. I don't want to put my email on here in public.

I am a lawyer and do a bit of property – but prefer structures and estate planning (pre and post death)

I agree. The Fin advisor will probably tell you to sell your house and put it into managed funds (commissions stay till June next  year I think).

That sort of advice should take 10 min and could be answered on the spot.

Tim,

You are right. Everyone should get tax advice from a lawyer and/or accountant.

But have a look at ATO ID 2001/79
http://law.ato.gov.au/atolaw/view.htm?docid=AID/AID200179/00001

Issue

Whether interest on funds borrowed to acquire the share of the taxpayer's spouse (the spouse) in a property, to be kept for investment purposes is deductible.

Decision

The interest is deductible under section 8-1 to the extent that the borrowed funds are used for the purposes of producing assessable income.

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But the ATO could still apply Part IVA