I think you are mis-using the term 'refinance' which may make things confusing. If you have paid off your loan, then there is nothign to refinance. You will be taking a new loan. This applies even if you have paid down the existing loan to $1 and then take money out via redraw – this is reborrowing.

What you said above is not correct.

You will be borrowing money – what will be money be used for? You will be buying a new house to live in, so the interest will not be deductible.

If you took out a new loan to add another bedroom on the existing house and then rented this house out, the interest would probably be deductible. But if you take the money and apply it to a property you will live in, then it won't be.

There is an overlap provision of 6 months too – where you can have 2 main residences and claim both, but it only applies if you are moving from one to the other and selling.

There is nothing really out there like that. You will need to see a solicitor and/or accountant to see what would work for you.

try trustmagic.com.au for some info
taxlawyer.com.au

Or you can buy the expensive http://www.taxinstitute.com.au/publications/new-trust-structures-guide-2010

I don't think the average property is a good investment in this climate. You need something special to get any gains.

Assuming you could find a good property, why not do both?

take out your cash and buy a house to live in, get the FHOG and stamp duty exemptions. Stay for 6 months, do it up to maximise valuations and rent. Then move out again but to your parents and rent the place out. Hopefully the rent will almost cover the loan.

Since you have lived in it you could keep it as your main residence and thereby CGT free for up to 6 years.

You then reborrow against it and invest in managed funds. You will now have a property growing in value and a deductible loan for the same amount of managed funds you started with – if not more.

Generally you will need 5 to 20% deposit. Maybe try for 5% and pay the LMI as that will leave more money for MF investing.

Why not leave ownership as is. Legals, stamp duty and CGT will kill you. If you are concerned about succession planning you could set up something in your wills.

If you are buying with the intention to make a profit by sub-dividing, then CGT may not even apply – it would be general income tax.

Tax would apply on the portion of the land that is split off. It may only be the portion retained as the PPOR that is exempt. eg if you split into 4 then 3/4 of the land will be subject to tax.

If your friends are on title then they will be required to go on the loans. So you would have to come to some other sort of arrangement such as a loan from them for the cash injection or have them as beneficiaries of a trust.

If they are beneficiaries of a trust and then they receive a distribution then this will create tax issues as non residents are generally taxed at 30%+.

You also need to be careful about the wording of the trust deed, if discretionary. If they are named, then some lenders will still require personal guarantees from them.

I agree with Greg – but just make sure you seek expert advice on setting this up or the ATO can disallow it. A recent application for a private ruling on something similar was rejected by the ATO. see http://www.bantacs.com.au lastest newsletter.

Trusts may costs a little to set up and run, but the benefits are great in the long run. It may not pay to transfer existing assets however.

Also consider the limited liability benefits of a company.

I think you may have confused a few things there.

Why bother with an offset on the investment property? I would not use one there until you have fully paid off the PPOR loan or have the 100% offset attached to this at the level of teh loan.

I am not sure what you mean by " Set up a Offset when you have build up enough equity in IP (To start with, you may have to put funds into offset yourself)". I would be putting all income and savings into the PPOR offset and paying everything from there. The reason for this is that money in the PPOR offset will be saving you interest which isn't deductible whereas if you had put money into a IP offset you will be saving interest, but this will be reducing your expenses and thereby mean more tax is payable.

Also not sure what you mean by "When you have build enough equity on IP, top up your offset attached to IP which can be further used to purchase subsequent IPs. " You can only increase an offset by adding cash into it. If you have equity what you would want to do is to borrow against it.