I was just thinking of all the capital gains I could have had on those properties that I wrapped. If only I had kept them.

I think the FHOG won't be around for ever, so you may as well use it while you can. Living in the property initially will also help making it CGT free.

I am still a fan of LOE, but it is a bit harder now than it once was.

Your accountant is an idiot!

Setting up a trust down the track after you have several properties will probably cost you hundreds of thousands of dollars in stamp duty and CGT.

your incomes may be low now, but what about in the future. What about each child receiving $3,000 pa tax free – this alone could save you a fortune in taxes.

What about the estate planning and asset protection benefits of a trust?

You would never buy a property in a company anyway as your will lose CGT 50% discount. Only look at discretionary trusts.

If you buy t live in you will get a CGT free asset, maybe the stamp duty exemption and FHOG too. You will have an asset which will be growing in value. If you invest you will also have an asset growing in value though.

The major different is the monthly cashflow. If you rent what will the rent be like in comparision to the repayments on buying? How much cheaper would it be to rent?

Also remember rent tends to go up every 6 to 12 months and you will have the added hassle of not being in your own property so cannot do improvements, do the garden up etc and could get kicked out when the lease expires.

Do some sums and compare the two. If you buy the investment I presume you will have to rent, so you will need to take into account rent payable, increasing every 6 months and the CGT payable on the investment if you were to sell.

You should be able to do this with a major bank such as ANZ – if the property is in personal names, and subject to serviceability

If we were looking at bathtubs then that analogy would be valid.

But we are talking about loans here. If you are looking at getting 1 loan and know which bank you want and have a pretty standard income etc then it may be wise to go to a rebater.

If someone wants to get multiple loans and has a complex situation then this may be counter productive. This is because certain skills are needed to plan the application for loans. To maximise serviceability certain banks need to be applied for before others, certain mortgage insurers need to be used for others etc etc.

A rebator could have these skills, but it is unlikely. If they did have these skills they would have plenty of clients and would not have to rebate.

A think a better analogy may be to barristers rather than baths. If you are up on a murder trial (and are innocent!) would you trust legal aid, or would you hire the best barrister you could afford?

Many things to think about.

Depending on the size of the place you may be able to use the PPOR CGT exemption, depending on whose name it is in and how it is set up – but you only get one property as your main residence.

You also need to consider centrelink benefits, land tax, and asset protection issues – eg if a future customer staying there were to fall over and break their back. You also need to consider non-financial aspects such as the benefits of the parents living there. Also estate planning needs to be considered – on death of one of the parties how and who gets their share etc.

Hi

IO = Interest Only

I think Steve was probably recommending loans not be cross collateralised.

Loans can still be cross colleteralised if each loan has a separate number. .
eg. PPOR value $100,000 with a loan of $20,000
IP 1 value $100,000 with a loan of $120,000

Each would be a separate loan number, but these loans would be cross collateralised – because the loan on the 2nd one is more than the value.

Maybe Steve was referring to not having one big loan, which is even worse,
eg. Loan 1 $140,000 with 2 properties securing it – PPOR and IP2.

The best way to do the above is
PPOR,
Loan 1 $20,000
Loan 2, $60,000 (can be a LOC)

IP1
Loan 1 $80,000

The loan 2 would be a limit of $60,000 (bringing it to 80% LVR), but the balance would be nil untill you used or withdraw money.
When you find IP1 you take the 20% deposit from loan 2, and you borrow the remaining 80% from loan 3.
This way all loans are stand alone, with no crossing of security.
Loans 1 and 2 must be at the same bank, but loan 3 can be with any lender.