You probably need to get the surveyors in to do the final inspection (assuming it is finished). They will sign off on it and tell council.

Market value is by definition what the market is willing to pay for something. So if a property can only be sold for $300,000 then it must be worth $300,000. Your greatest problem, if you are able to find these things, will be valuations. It would be extremely unlikely for you to buy a house for $300,000 and then the value to come in at $400,000 without extensive renovations and/or time. Valuers will see what you paid for it on their searches. In all my 9 years of acting as a broker I only seen a few valuations come in substantially higher than purchase price. One was a unit where the one across from the one being purchased sold for 20% more. Since these were identical the valuer had to value the same. But few houses are the same so it is much harder.

In Australia you make the offers on the contract of sale. You can do them verbally or on a fax or email, but these wouldnt be legally binding, usually, even if accepted.

If you can buy if for $300,000 is it really worth $400,000? Thats how they may see it.

What is a OTP Addendum? Off the plan?

I haven't seen the private ruling, so not sure why it was rejected but think it was due to the LOC being secured against the same home as the main loan. So this made it look too much like the scheme in the Harts case.

I would still recomend trying to set up a debt recyling strategy – just do it property so that it is not a scheme. Best to pay for some advice to be safe.

You are not really relying on captal growth on the IP – unless you only have limited euqity I guess. Overall your loan levels should remain the same. You non deductible debt will be reducing at the same rate as the deductible is increasing.

There is nothing wrong with putting wages and rents into an offset account. This is what you should be doing, otherwise you will end up with a mess. The question is should you be borrowing from the LOC to pay the interest on the investment loans and should you bepaying the interest on the LOC or letting it capitalise?

Not so lucky. The banks work on the lower of valuation or purchase price

Maybe you should sit down and do the sums on both scenarios and see how much better off you will be.

Then consider a third scenario. If it is jointly owned one person could buy the share of the other. This would allow further borrowings which would be tax deductible and the cash released would be able to pay down non deductible debt. This may cost a bit in stamp duty (may be exempt in vic) but it will save you a lot on tax each year.

Up to around 95% loans are available.

No money down is possible in Australia by using a second property – either cross collateralising or borrowing extra from one property and using the cash as deposit for the 2nd. There are also a few tricks you can do such as vendor financing – but this is difficult in this climate.

This is not correct. There are millions of people who permanent residence who purchase as well.

No, there is more to it than that. You must make sure it doesn't look like a scheme to reduce tax. Best to get a private ruling i think.

try Brett Davies Lawyers