Why not do both.

Buy a PPOR, live in it for a while, then rent it out. You can maintain it exempt from CGT and still be able to claim all the deductions.

better use a solicitor next time.

I would suggest IO for your loans, especially investments. You should save the same interest anyway if you have the offset (unless you are tempted to spend).

You should be bale to apply for a loan increase too.

Banks will take into consideration you living at home, some banks will assume you pay a small rent others may not.

Hope you can keep on saving. I have tried to cut down my spending by not buying all the useless garbage i used to – I have even bought clothes and never worn them!

for CGT see s118.145 ITAA 1997. You can be absent for up to 6 years and not have to pay CGT.

It depends on your view of property growth. If property were to grow more than your cost of holding it, then it would be better to hold more properties.

How good is your crystal ball?

Why is he worried about asset protection relating to a loan? it is the ownership of the property that counts. Maybe he is thinking that the loan could be associated with the trustee in its own right and so if the trust is attacked it would have no loan and more equity. But I can't see this as happening.

ok, that may make it doable.

But if someone cannot pay the mortgage then they are possibly in great financial difficulty. If they were later to go bankrupt then you may have to deal with the clawback provisions of the Bankruptcy Act, particularly if you are paying under market value for a property. So make sure you seek legal advice for this sort of thing before you start making offers.

Hi GOM

Using a unit trust can be a good idea as it may be possible to transfer the units without triggering stamp duty.

I am not sure on the land tax though. I haven't really looked into it, but I don't think it would be possible to avoid land trust in NSW with such a structure. The fact that a discretionary trust is the owner of the units would possibly make it the same as if the property was owned by the discretionary trust itself. Are the solicitor's initials TC?

Always own growth assets under  a discretionary trust structure as this offers the greates flexibility in terms of tax and some asset protection as well. Never run a business through the same structure, always have these separate because of the risks.

As you have paid off one property already and run a company you should consider using a DT for the next one as you need not worry about losses accumulating in the trust.

Children can receive distributions from trusts – however they are taxed at penalty rates over a certain amount. They can earn around $3000 pa and pay no tax however.

It is just an option agreement.

If you cannot settle or assign your option to someone before expiry it is over for you. You would lose your option fee and any expenses incurred and will have no rights over the property unless you can negotiate a whole new agreement.

It is a very good strategy for making money from seminars, but very hard to implement in practice with real property – probably works well with shares tho.