Trusts are not legal entities, so the name on title will actually be the trustee and this is considered the trust owning the property.

Loans don't really matter for taxation it is the ownership that is important. If owned by X as trustee then it will be the trust that claims the interest and expenses, not X. You can have both names on the loan or guarantee the loan. Doesn't really matter which way.

I would think you should try one in your own names first and that way you could avoid tax if it was not your intention on doing it as a business.

If you default on a loan the bank is going to eventually get your other assets, but have a mortgage will make it quicker and easier for them. If a property is mortgaged and you default they can take repossession and sell. If no mortgage they will have to get a judgment against you and then enforce it by applying to seize property etc.

But it is not just this, it is the flexibility of avoid cc that is important. You can move around and sell properties without getting approvals from the bank.

eg imagine if you had a $360,000 loan using 2 properties as security with a value of $200,00 each.
5 years later you want to sell property A for $210,000 and reduce the loan to $160,000. You will need the bank';s permission to do this as they hold the properties as security. Bit of a hassle but nothing major, unless property B has dropped in value. Say it is worth $160,000 now. that would leave the LVR at 100%.

In this instance the bank would only allow the release of property A if the loan on property B was paid down to, say, 90%.
This happened to someone I know.

If you had avoided CC you would not have a problem – with the bank anyway, but you would still have the problem of owning a house with a value less than the loan. But the bank would not know this.

You can only have one main resident at any one time (can have 2 over 6months under some circumstances), but you could have 100 properties and still claim 1. You could actually claim 6 or more- just not at the same time.

 Read the leglislation, a118.145 above.

thanks

misleading and deceptive conduct perhaps?

Insurance can't protect you in many cases.

say you start a business for example and it fails.

Or you start a company and give a personal guarantee and then your largest client goes under leaving you with no cashflow and your company collapses. Don't think there is insurance for this (there may be actually?) but you get the drift. Something can happen that is not entirely your fault and this could have devastating effect.

Asset protection is not as simple as forming a trust – it is more like an art than a science as you need careful planning to implement a strategy that works.

Unit trusts provide no asset protection, companies limited protection in certain circumstances and the same with discretionary trusts.

Sorry, I had this around the wrong way – This section applies when converting a PPOR to an investment. Then you will need a valuation.

I am being charged 3% on one property and 2.5% on another. But I am offering them more based on a progressive scale – the higher they sell for the more they get.

two ways to do it.

1. Use the investment property as additional security for the new home and borrow 100% of the new home value

2. Borrow some money from the investment property, such as increasing the loan/redraw/LOC etc and then use this cash for deposit on the new home.

In both cases the money borrowed has been used for private expenses and the interest wouldn't be deductible.

You may have a scheme – read that private ruling a bit more closely. I have links to more rulings where the outcome was positive too. Will post later.