100% of borrowings for the new property. 20% from LOC and 80% from new IO loan.

see s118.145 ITAA 1997. A temporary absence from your main residence may not trigger CGT.

I think he is wrong about the depreciation bit. Ask him for authority to back up his claim.

All expenses for the property are added up and then deducted from the rent. This income or loss is then added to your other income for the year

If you don't like it then don't use their services.

I am a solicitor and have charged $8,000 for conveyancing for one guy as I billed by the hour.

There are guys down chinatown doing it for $500 if you want.

The units of the unit trust could later be redeemed by the trustee and the trust could convert into a discretionary trust (must have it set up properly). The trustee could borrow to buy the units back and this interest could be deductible (refinancing principle). This will free up more cash to pay down private debt. Later on the units could then be transferred to a smsf, if property unencumbered, and then from there could could get tax free rent and CGT free sales once you have retired.

A complex area with a host of things to consider.

Jo,

The debt would become deductible not because it is negatively geared, but because they borrowing was used to purchase an income producing asset.

Borrowing 100% plus costs would free up more money and create bigger deductions.

Jean,

If it is for a loan then do you even need a stamp? You should also take great care in signing it correctly as if you get it wrong they will need to redo the documents. Probably best to go into the bank and do it in front of them on their instructions.

You could enter into a short agreement. Say 2 weeks. Then if the buyer doesn't appear you can ditch the agent. If there really is a buyer then the agent can still get his commission if the agreement expires if they include a clause along these lines – which they normally do.

I think finance may be your greatest problem. If it is in a flood prone area then lenders may not want to lend or was it a one off flood?

The lenders may also have problems with the state of the property. Is it liveable at the moment? if not then maybe finance will be based on the land value only.

Insurance is another thing you should look at. Possibly high premiums and make sure the house is covered for flood damage!

No bankruptcy protection with a unit trust as the units are considered property under the bankruptcy act. You would have to hold the units via a discretionary trust to get any protection.

But certain unit trusts could enable the land tax threshold to be obtained, but only if an individual were to hold the units.

Bascially, you cannot have one structure with all the benefits. You have to give up someone to get something else. eg. give up asset protection and you can save more tax.

I should also point out that hopelfully your rental income will rise so that your trust may be positive taxable income very soon. From then on the discretionary trust would be the way to go. You cannot change without great cost so giving up some deductions now may result in greater savings and other benefits in the future.

Only newbies go on about building/finding a 'team'. It must be something you learn at one of those expensive seminars??