Hi

Many lenders have  a max LVR they will go to. eg. ANZ is now 90% in total, including LMI. So if you were to borrow less, you could add the LMI to the top as long as the total LVR is less than 90%.

Sounds like an assignment question.

i wouls say a) as depreciation is a non-cash deduction

I don't think it matters too much. As long as you only use the LOC for investments you should be ok. If your new IP has equity, then you could increase the loan and repay the LOC or you could set up a new LOC on the IO and use this for the next one.

One thing it watch out with a LOC is the potential for a margin call or a sudden request by the lender for you to reduce the balance.

why pay a loan down at all when you can save the same interest by using the offset account. One you deposit into a loan you cannot withdraw without tax consequences.

eg. You have a $200,000 investment loan and pay it down to $100,000.
You then buy a new home – you will have $100,000 less cash available. So your new loan will be $100,000 larger.
In the mean time you will be paying tax on your rent while paying around $5,000 extra interest on your new PPOR loan – which won't be deductible – so maybe $2,000 pa in extra tax + the tax on the rent.

Which bank:? there are not many 95% loans left these days.

Hi

I think your questions make sense. You use the term partnership in the general sense, though what you end up doing may be different in the legal sense.

You could do it 3 ways
1. A unit trust.
This is a trust with units (simmilar to a company with shares). each person holds 50% (or whatever) of the units.
All profits would be distributed to unit holders in accordance with their ownership. Simple to set up

2. Discretionary Trust
This is a trust where the trustee makes the decisions and can allocate profits as they seem fit. This may be preferrable as they can send the profits to the lowerst income earner to save tax. Profits can also be diverted to family members.

Potential problems is that the profits may not be distributed evenly between the 2 people. This can be gotten around by using a unit trust with each unit holder having their own discretionary trust own the units.

Discretionary trusts offer asset protection if you are personally sued.

3. Company
This is a separate legal entity so give you some asset protection (if company is used) and the shares can be evenly owned by the 2. It is flexibible too.

You can also have a separate discretionary trust own your shares so the profits can go into the trust and then to the lowerst tax payers to save tax.

4. Individuals as joint owners
This is the simplest, though the least flexible.

there are lots of issues with finance and you need some careful planning.

I suggest you read up on each of these structures and get a good idea before you go and see an accountant.

Don't forget partnerships are very risky as all partners are jointly and severably liable for the whole partnership debt. If all the other partners decide not to pay you will be left to wear it.

I would recomend to never form a partnership of individuals

Yes.

If you have signed a contract to purchase a property, then you have a caveatable interest in that property. So you can lodge a caveat.
You should talk to a lawyer.

Spud

You have posted the same post about 10 times!

since you have such a large deposit, you could possibly qualify for a 60% LVR low doc.