Hi Wide

Where are you living now? Do you have a mortgage on that property? And I see you have some consumer debt.

Why not change all your loans to IO immediately. You should divert the extra money you are paying on your deductible loans to the consumer debt. The faster you finish this the more interest you will save – interest which you cannot claim.

Also set up a 100% offset account on one of your loans and place all spare cash in this (after the consumer debt is paid). This will save you interest on your loans the same as if you had paid into the loan. If you still have a loan on your own home, then set up the 100% offset on this loan as you will save non-deductible interest.

If prices drop in the near future, don't worry too much. It may not matter too much if you are gettting rents, especially positive cashflow. Just hope that prices will rise again!

If you do decide to sell factor in CGT. You may find selling one house will result in less tax. If you sell all in one financial year, you could be slugged with heaps more tax.

Also if you spouse is not working it may be wise to sell during this time (if in her name) as this may mean less CGT.

In most cases they don't check, but they are auditing a number or percentage of receivers of the grant. They will send you a letter and ask you to provide proof you were living there – then it is up to you – bills, electoral roll, rates notices, connections etc all can be used.

I just had to ring Bankwest and was advised they are taking 15 days now. Working days = 3 weeks

i have previously bought about 10 unseen. But now I probably woudn't do so again. You need to get a feel for the area and see the surrounding houses and parks and whatever else is there. Otherwise who knows what you could be getting yourself into. Getting a mate or a building inspector etc to look at the place won't really tell you this info.

I think I was just lucky that I had no major problems

Hmmmm. Think about what you are asking.

Would you reduce your loan on the main residence and save interest – which is non-deductible?

or

Would you reduce the loan on your investment property and save interest which is deductible?

It would be better to have bigger deductions to save more tax wouldn't it?

But, I would do it slightly different and have both loans IO and pay neither off. But have a 100% offset account against the loan on the main residence. This way, if you move back into the unit, or to another property, you can take your money with you and establish a new 100% offset account on the new main residence and save non-deductible interest,

yeha, good idea about the shares. Look at using a discretionary trust to own them

and http://www.austlii.edu.au/cgi-bin/sinodisp/au/cases/cth/HCA/1999/7.html?query=^steele
for Steele v FCT

The topic of this thread is lenders mortgage insurance. This protects the lender if the borrower defaults. The borrower will then be pursued by the insurance company.

One thing you need to consider then is that if a trust doesn't distribute the income then it is taxed at tax marginal rate. So each year you will need to find someone to distribute to. if you are a non-resident that the tax will be starting at 30% and up.

Just because you have signed and/or nominee doesn't mean you can nominate anyone. Its not that easy. You will be charged stamp duty as will the girlgfriend, unless the OSR has proof you had an agreement prior to signing the original contract.

I would suggest you get the highest loan possible for the studio and make it interest only with a 100% offset account. Live in the place first, establish it as your main residence and then you have the flexibility later to work around the CGT exemption. When you buy the new place do the same – high IO loan with a 100% offset account. that way which ever place you move out of will have a high loan for tax purposes and your cash will be available and there should be no tax problems of redrawing the money etc.