I think yield should not be regarded as profit but as return on investment (before costs). it doesn't take into account borrowings just return based on value.

There is no transfer required if you wish to change your property into an investment. You simply move out and rent it. Not really a loop hole in my opinion as the requirement for the FHOG is to live in the property for at least 6 months. As long as you do that you are abiding by the regulations.

I agree that you should only deal with a major bank, or you will regret it later when you want to change the loan, get a LOC, access equity or exit the loan.

Possibly you may even have a capital loss.

You will need something better than the "bank said" though if audited.

Banker, I started going direct as well. I agree that it is much easier -It was so hard dealing with the broker channel. – But now am no longer in finance.

There is no use in just buying something for the sake of it. Especially if it doesn't perform. Also not tax effective to put down such a large deposit and pay off the loan so quick. What about if you want to buy a place to live in later on? You will have no cash left so will need a large loan – which won't be deductible and you will be paying tax on the rent you receive with little deductions.

St George may do it too.

I think you will find it is way too complicated for a book to cover it all and be up to date. Things, especially in tax, change rapidly.

You will need a good law book to cover the legal aspects and a different one to cover the tax aspects.

A couple I have are:
-The Trust Structure Guide by Harwood Lawyers
-Drafting Trusts and Will Trusts in Australia by Kessler???
-Trust Law in Australia by Ong

Yes, that is a good point JJ

Not really correct.

A company is a separate tax entity to a trust. Each is a separate person for tax purposes and has to file its own tax return.

If your company makes $50,000 profit and a trust looses $50,000 from negative gearing, the company income can't offset the loss of the trust with the net result an income of $0.

What will happen is the company has to pay tax of 30% of $50,000 ($15,000) and the trust's loss has to roll over to next year to be offset by any positive income. If none it keeps rolling over.

Companies also cannot distribute income flexibly like you have mentioned. The company would have to employ you to distribute money to you, or you would have to own shares and get a dividend. The same with the kids, but depending on their ages they may be taxed at around 66% on unearned income.

Maybe your company is a trustee of a trust??? This would be different. Your company would only be acting as the legal owner and it is really the trust that is running the business.

if this is the case then it would be dangerous to put the investment property into the same trust as the business. but if you did the loss of the property could be used to offset the income of the business because it is all with the same tax entity.

A better way to do it would be for the trust to own shares of the company with the company operating in its own right (not as trustee). Shareholders generally cannot be sued for actions of the company. So when the company operates, it is run by the husband (keep wife out of it) with a small wage paid to the husband, expenses taken out and then the profit distributed to the trust.

It may even be wise to have a separate trust to own the property and a different one to own the shares. The first trust would make a profit and then this would be distributed to the second one.

Also you should note that adults can earn up to $16,000 pa tax free now and kids around $3,600 pa tax free.

all this needs careful set up – and implementation as there a lots of issues such as family trust elections etc.