Why look at creating a trust?
Why pay PI on an investment property?

I think you should do some more reading.

This is legal advice so best to speak to a lawyer as it relates to state taxes.

See s 12 Land Tax Act
http://www.austlii.edu.au/au/legis/sa/consol_act/lta193690/s12.html

12—Tax in cases where there are two or more owners

(1) Subject to subsection (2)

, where two or more persons are the owners of land, the same amount of land tax is payable in respect of that land as if only one person were the owner.

(2) Subsection (1)

does not affect the operation of any provisions of this Act under which the value of land is aggregated, for the purpose of the assessment of tax, with the value of other land.

Hi Tony

I don’t take inflation into account because working in todays dollars should be enough as long as the property and rent growth is the same or more than the inflation the passive income goal should match todays dollars – or be better.

Work it out like this
1 estimate the yield of the types of property you are after
2. reduce this by about 1% for costs
3. Divide the desired income by the figure in 2

In this case assuming you get a 5% yield, take this as 4% after costs
$250,000 divided by 4% =$6,250,000

So you will need $6,250,000 worth of unencumbered property to get an income of $250,000 per year (before tax).

Now work out the average value of the property you are looking to get. lets say $500,000 properties
$6,250,000 divided by 500,000 = 12.5

So you will need around 13 properties valued at $500,000 (in todays dollars) all fully paid off to retire.

Of this may be 26 properties with 50% LVR loans perhaps.

Uncrossing is good, but it won’t help you pay off a loan any earlier.

Benny trusts cannot distribute losses but what you may be thinking of is some borrowing to subscribe to units of a fixed unit trust and the trustee using that cash to pay for the property. Those borrowing to buy income oroducing units could claim the interest against their own income. If they are individuals and the interest is less than the trust income recieved there would be a loss and this loss can reduce other income. Ie negative gearing in personal name with property owned by the trustee.

I think increasing the loan shouldn’t produce any tax issues if the loan itself relates to only the units. Once complete the loans can be split and the property strata titled At that point the security for each of the 3 splits can be secured by the unit it relates to.

Get tax advice.

Yes it is possible to structure a company or a trust so that only one of you will need to give a guarantee.

Although transferring to another entity will result in stamp duty and trigger CGT it can be beneficial – especially if there is a bit of equity that has build up.

Companies get a separate land tax threshold in most states and they can retain earnings too so they can be a great way to own property – tax can potentially be less than that in your own name.

Your step dad’s company can lend your company money and can secure this by taking a second mortgage, either registered or unregistered. This should help the company secure its debt. There should be a written loan agreement between the two companies and each party should seek separate legal advice.

You should also seek legal advice before you set up the company on how it should be structured – probably one director and the sharehold being the trustee of a discretionary trust would be worth considering.

I believe it is just a marketing term – the name doesn’t really matter. If you want asset protection on bankruptcy you should really get legal advice (from a lawyer) because the trust deed is only one part of it. The important part is how the transactions are structured.

For example if you make a ‘gift’ without anything changing hands the gift will fail at law.