I have not seen a lender that has higher rates for IO loans. Who are you with?

I would still have it IO and have an offset because you may find your circumstances change and you may not move back in. If you want PI then that is ok and the interest portion would be deductible.

You would have to pay bank fees and some govt charges like discharge of mortgages etc. Banks may waive their fees if you are staying so this is worth negotiating.

Stamp duty will depend on the State that the property is located in. Generally stamp duty will apply unless it is the main residence – except, i think in Vic, where spouses can transfer investment properties between themselves without stamp duty. No such thing as compassionate discounts I am afraid.

bb8

I would suggest you still see an tax advisor about structuring your business. It may be possible to set yourself up to get around the PSI rules. There are many medical practitioners doing this. You may be able to squeeze a service trust in there somewhere. The trust can provide administrative services for your business or maybe hold equipment and allow you use for a small fee.

But other than that the way you suggest above sounds good. If your trust has low interest, then it will be more likely be making a profit and then you won't have losses to worry about. Don't forget to factor in non cash deductions such as depreciation and loan costs.

Not sure what you mean about maximise the loan on the existing IP. remember you can't just increase the loan – the interest on the increase will only be deductible if it relates to investment use.

Yes, there are various rules to look at. especially the alienation of personal services income rule. Under some circumstances the ATO can deem income earned by a company or trust is actually the income of the person who does the work. Whether you can get around this will depend on your circumstances.

It doesn't really matter who is behind the trust so much as long as everything is done at arms length ie commercially justifiable.

You may be able to divert part of your income into the trust. Just enough to offset the loss maybe.

bb8

If you are at risk because of your job, then operating thru a separate company will limit your liability to some extent. It may also allow you to divert income into the trust with the losses so the income from the business can offset the losses. This will reduce your taxable income too.

However, the banks will view this as being self employed and would want to see financials, ideally for 2 years.

Put in a paper application? Or put down the date you acquired the land maybe

Some people actually sing papers allowing people to lodge a caveat if a bill isn't paid – solicitors and builders often do this. It may also depend on what the debt is for. eg. if you lend X $20,000 and X uses the money as deposit on the property, then you would have an equitable interest in that property.

Re the selling of property, this is not related to a caveat, but the satisying of a court judgment. If someone gets a judgment against someone else then they can proceed to sell their property, including real property, if they don't pay up. Even if the property has a mortgage over it it could be sold and the mortgage paid out, then the debt satisfied.

Your welcome

I can't stand to see people lose money, or not save money, when a simple adjustment of how they structure their loans will save them.

There are ownership issues with non citizens buying land in Indonesia. Do a google search and you will see how complex it is.

There are other issues too such as:
– Language – can you read contracts in Indonesian?
– Ripping off the foreigner – seems like foreigners will get charged extra for everything from cleaning to repairs ot electricity. This may be worse if you are not in the country to check
– corruption – like mopst poor countries corruption is rift with brobery a common and accepted practice. What happens when the mistress of a senior police officer moves into your unit and stops paying rent? (this happened to a friend of mine).
– decay – being a tropical area the buildings seem to decay faster and need painting etc more often
– borrowing. I doubt you would be able to borrow to buy into that project. So there is an opportunity cost of using your cash. You could make better returns in Australia.
– Tax. Tax issues can be complex as you will need to consider indonesian tax as well as Australia. That will mean much more in fees, and maybe difficulty in finding an accountant who knows both systems.
– guarantees – are essentially worthless.

That sounds about right. Just don't use the redraw on loan 1.

Since your current home is going to be an investment you could borrow from Loan 2 now for paying all associated costs. Later on when you do rent it the interest should be deductible as you have incurred the interest in money borrowed for the property that is being rented..