You would lose any main residence CGT exemption with the trust, so this may not be ideal if you are buying with the intention to live in part of it.

What you could consider is to buy it in your name jointly with a trust. You would set up a deed of partition so that you each own the same percentage as the final carve up of the block, then when subdivison goes through you could avoid stamp duty (or pay nominal amount) and end up with one block in your name and one block in the trust. CGT would be delayed on this transfer too I think.

Talk to your lawyer

But if there are less investors buying then there will be more owner occupiers buying and therefore less renters?

I think the main effect may be a decrease in new properties being built as investors would be less inclined to invest in construction. However, most developers would not be negative gearing anyway so maybe this won't be effected.

BJ has pretty much covered it.

One of the major disadvantages of a trust is that you cannot claim any loss of the trust against your personal income. In Chris' case there is no loan or personal debt and $20k in savings so I think it would be a good idea to use a trust.

This is because any spare cash can be gifted to the trust (asset protection and tax advantages). Any loss from investing will be short term as the trust builds up cash (put into an offset account maybe) and rents increase. Any positive cashflow can be dealt with tax effectively from there.

It would be a bit of a hassle with the lender and the conveyancing, but you could do 10% per year for 10 years even!

BTW, if the house was owned by a company as trustee for a unit trust then you could just transfer a few units each year without any stamp duty and without changing the name on title.

Hi Caleb

sorry to hear about your accident. $500,000 is a lot of money to have and you should therefore do some careful planning and seek professional advice from a good lawyer too.
I think there are many things to consider such as asset protection for that $500,000. Implementing some strategies now could help save you money years down the track if something happens.

Taxation also needs to be considered. If you are suffering from a disability you should look into disability trusts and discretionary trusts.

If you are not working and have no income, other than the interest, then you will find it hard to get finance initially.But there may be ways around this later on.

Yes, i dont now of any restrictions for permanent residents either.

You should have your deed worded so that any company in which you are or were a shareholder or director or office holder is a beneficiary. Not necessarily just the trustee. Its probably not a good idea to distribute to the trustee anyway because if the trust is sued the trustee will be liable.

Unilodge at broadway?

There are many threads heere ont that including one recent one.

Scha

Sounds like a bad experience. How much did they charge you for that?

Gifting is good, but there are problems you need to consider such as the claw back provisions of the Bankruptcy Act – if you go down the money can be clawed back indefinitely if you gifted with the intention to avoid creditors, up to 10 years otherwise. Also unless you have paid off your home loan you will face the dilemma of whether to pay off the home loan first and saving you interest, or just gifting your cash. (you could also gift to the trust and then borrow it back interest free to pay down the home loan – depending on your deed).

Unit trust is good but I am not sure you would be able to claim all the interest on the loan to buy the units if you only had income units. Its not a matter of you just paying the interest, you actually have to borrow to buy the units.

Did you see the thread about hybrid trusts by Chris Batten on somersoft? very interesting