brizziegirl wrote:

I’m sorry to enter this conversation in a way that may demonstrate my ignorance and may be a silly question, however I interpreted your first post as saying changing all his loans to P&I to increase lending. How does a move to P&I improve lending? If you could explain that, it would be most appreciated because it’s somethings I’m not aware of :-) Thanks

Yes it can improve serviceability – you would think the opposite though.

These days most lenders assess payments for other financial institution loans as PI and ignore any IO period.

So having a new IO loan for $100,000, 5 years IO and 25 years PI, for example, will result in the lender assessing the loan as 25 years PI.

However if the loan was PI from the start it would be assessed at 30 years PI.

Longer loan term means lower repayments which means better servicing.

Probably non-disclosure. leave off a kid, a loan etc and serviceability booms. Bank staff do it as well as brokers – fraud

A valuation would be needed if it was your main residence and then become income producing. This would occur when renting out a room, a granny flat, operating a business there or just renting te property out.

The cost base would then be the value at the time it was first income producing. All the aquisition costs and interest etc until that point are then ‘lost’ or not claimable against the CGT.

Scott No Mates wrote:

Nil provided that this was your only ppor and that you rented or didn’t own & claim your other place as your ppor.

Coudn’t claim the main residence exemption until after moving in.

First is correct.

The valuation amount when you move in is irrelevant.
$500 pp $600 sale = 100k capital gain.
You have owned it 2 years. Lived in it for 1 year.
So 50% of the $100k will be assessable gain = $50k then you can apply the 50% CGT discount = $25k
This $25k gets added to your other income so the max tax would be $12k approx.

Also this can be reduced by cost base adjustments for most of the expenses incurred in acquiring, holding and disposing of the property (that you have not otherwise claimed).

See 118-185 ITAA97
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charlie123 wrote:

Hi Terry,
I would be looking to purchase using a company, what would the requirements be to qualify and what lvr could you do? Also what rate of interest could I expect?

Consider the structure of the company when setting up – parties such as who should be the director and shareholders how the constitution should be structured and also tax considerations, land tax, depreciation and franking credits etc.

Once the company is set up it can apply for the loan with the director(s) giving personal guarantees. Same LVRs, rates etc as persons with most banks.

Merry Christmas

Don’t forget to claim a tax deduction (TD 2016/14)

Giving a personal guarantee generally means the lenders will assess you as if you had borrowed the money yourself. However it will come down to the lender and how deep the dig.

lease docs are not non recourse.

I don’t know of any lender lending on a non recourse basis in Australia.

Vendor may have problems getting tenants out in time for settlement and wants to push that on to any purchaser.