what sort of agreement do you have? An installment contract maybe? This may mean that they have up to 30 years to settle – but it will all depend on the agreement. I suggest you dig out the agreement and see what it says.

No, it is the income requirement. Equity is only one consideration.

No, or few lenders are going to lend to you if you cannot demonstrate you have the ability to pay the loan.

Yes, i think stamp duty would be payable.

CGT would also be applicable if it was initially an investment property.

Since ownership is changing you will also need to redo the loans. Possible exit fees, though the bank may waive these if you are staying. You should try to avoid cross collateralising properties if you are going to restructure this.

you should also consider the long term aspects. If the property is just in one name then later when you sell this person will get all the capital gains too.

Declaring rent from renting out the rooms will mean you will lose the CGT exemption for this portion of the property. This will probably be a lot more than the tax savings you could get.

Even if you will be paying the same rent, it may still be worth moving out for a few years and claiming your expenses associated with the property. This can be done without losing the CGT exemption under, s 188-145 of the ITAA 1936, for up to 6 years.

You will need to meet the requirements of 'living' there. So you should look at the OSR site and see if there are any rulings which define 'live in'. Probably best to try the FHOG Act first. I think the ruling there is that you must live in the property for 6 months starting within the first 12 months.

The ATO requirements will be different to the OSR which are State based, but they will be similar. For the CG side the meaning of main residence or principle residence is outlined in a ruling. It includes things such as where you consider your home to be, address on electoral roll, connections of services etc. Once you can classify it as your main residence you can rent it out for up to 6 years and avoid CGT under s118-145 of the ITAA.

Opps, I was typing too fast. I think I meant LOC – can't see how you could get into trouble with an offset as long as you haven't withdrawn equity and are parking it there.

Someone else mentioned you cannot direct debt from it – not sure if this is correct or not.

dodga

Do you realize that you can claim the interest on borrowed my to lend to the trust, but you will need to declare the interest the trust pays you as income. They should cancel each other out so you will get no benefit. The trust will get the benefit of claiming the interest it pays you however.

Also note the asset protection implications of lending rather than gifting. Money lent by you remains your money and will be available to creditors if you go under.

Also note that there are complex tax issues with losses with trusts. You may need to make a family trust election which may limit the beneficiaries of the trust to close family members. So you need to get some advice on this.

Technically there could be a problem though. As the trust is a discretionary trust, there is no guarantee the trustee will distribute anything at all to you. Although in practice I think banks consider the past performance and ignore this technicallity.

Anyway congratulations on becoming partner Dan.

Yes, used to use them a lot. Bankwest are not so competitive now and are not very trust friendly.
St G have 3 different offset accounts, only one of which do the savings come off the interest, the others reduce principle evne on an IO loan.

St G's LOC is very good, especially with the ability to have separate accounts set up after settlement and with different names. But ehse should only be used to access equity. If you start putting salary and wages into an offset you could get into trouble. It also has a high rate.