The FHOG is not concerned with whose name is on the loan, but who is on title. Maybe you could get one each?

Roy

Why not use a 100% offset – which makes things less complicated with tax if you need some of your money back but give you the same result.

And if you have a loan that is non-deductible, why not pay that first – otherwise you are paying more tax.

where is kochi?

Hi BB

That means you are making a profit which is good. Don't forget the trust doesn't have to distribute to you. Some of all could go to a child/husband/relative. If none are available, or already earn too high, then you could distribute to a company and cap the tax at 30%.

There is a estimation of construction costs calculator here:
http://www.bmtqs.com.au/construction_cost_calculator.htm

Market value is the price a purchaser is willing to pay, so if you buy it for $90k, it is probably only worth $90k.

If you had cash (eg LOC from existing property), maybe you could pay $120,000 with a $30k rebate for work not completed – eg a promise of a pool to be constructed before settlement. You are not deceiving a bank as there is not bank involved at this stage.

Later on you go for finance.

Check this with your solicitor and see if they think it ok

Here is a bit from a newsletter on Japan that I subscribe to:

Terrie's Take 485 — Holiday Homes in the Mountains, ebiz news from Japan

* * * * * * * * * T E R R I E 'S T A K E * * * * * * *
A weekly roundup of news & information from Terrie Lloyd.
(http://www.terrie.com)

General Edition Sunday, September 15, 2008 Issue No. 485

+++ WHAT'S NEW

Some interesting things going on in real estate here in
Japan. Firstly the bad news. In Q2 this year, the value of
real estate transactions by REITs and listed companies
dropped by 51% over the same period last year. The main
reason for this was that the demand for condominiums by the
buying public have plunged dramatically, resulting in condo
sales being off by a remarkable 84%. We are now in the
midst of a severe credit crunch locally and many of the
recently listed REITs are having to sell off their assets
to foreign investors, who have picked their timing well. We
expect more REITs to go bust, or to get bought out.

Now, much of this news involves speculation and
institutions, and so is not entirely relevant for the man
in the street — other than the fact that people are
putting off buying somewhere new to live. But there is an
interesting new trend developing, that of foreigners
(individuals, not companies) who are independently
purchasing real estate here in Japan. This trend was kicked
off by the availability of loans to non-permanent foreign
residents by Shinsei and other banks about 4-5 years ago,
then reinforced by Australian interest in the Niseko ski
fields in Hokkaido, and has since started picking up steam
on a broader front.

Just last week a Japanese web site providing tourism
information for Russian visitors, started running real
estate listings also in Russian. The firm feels that as
with the Australians, as Russians become familiar with Japan
— they're visiting Otaru from the oil fields of Sakhalin
in droves, then they also start thinking about buying
land to put holiday homes on. No reports of an actual
purchases yet, but given the level of activity by Russian
property purchasers in Europe, we don't think it will take
long.
Australia's fascination with Niseko has provided the real
impetus for Japanese regional players to start realizing
that temporary foreign residents are desirable as land
owners and should be serviced. There are now more than
15,000 Australians traveling to Niseko every winter, to
ski on the dry powder snow that it is famous for. An
Australian-owned realtor, Hokkaido Tracks, whom we've
been following for some years, has announced that they plan
to construct 17 luxury condos at the Furano ski resort,
further north, selling the 58 sq. m. — 133 sq. m. units
for prices ranging between JPY40m (US$370k) — JPY125m
(US$1.16m).

Yes, these are Tokyo prices, and there is no way that
anyone in that area could have imagined it would ever get
this crazy. But, when you have a great concept (i.e.,
fantastic powder snow in a safe country just hours away), a
solid consumer demand (Asians are starting to join the
Australians), and an emerging internationalized
infrastructure which removes foreigners from the
inconveniences of Japanese language and Japanese
developers, then anything is possible — even in rural
Japan.

Buying land as a foreigner is not that hard, especially if
you're looking for a holiday home outside of the major
cities. There are no residency requirements, and so long as
you have cash, realtors are happy to deal with all-comers
— especially since in many rural areas the market for
spare land has been in a deep funk for 18 years or more.
The realtor fee is generally around 3% of the purchase
price. To be sure, there is paperwork involved and taxes,
utilities, and other fees to be paid, so you will need a
Japanese bilingual lawyer or representative. But this is
only as hard as a web search and some calls to bilingual
law offices, property managers, and/or translation
companies.

Once a non-resident has taken possession of the land, they
can come in on a tourist visa as often as they want, with
the excuse that they're here to check their investment.
They would typically come in on the standard 90-day (30
days for some countries) visa. Even though they are non-
resident, foreigners can open a bank account to autopay
taxes and bills, by going to the local city office and
asking them to validate that the fact that the person is a
property-owner.

There are a surprising number of homes and land plots for
sale in picturesque parts of the country, making them ideal
for holiday homes, and we imagine that it won't be long
before Korean and Chinese buyers start to realize what the
Australians have: fun, food, friends, fascination, and
'furo, all at reasonable prices. We can envisage a
situation where an inflow of foreign real estate
investors into rural and coastal areas will make up for the
ongoing exodus of young Japanese to the cities.

If you have the cash ready to go, the land is available.
But what if you have to borrow some of the money? Certainly
your hometown bank isn't going to have the ability nor the
tie-ups necessary to value land located somewhere deep in
the Japanese countryside. We know from personal experience
that even Tokyo City banks are generally unable to value
property outside the major populated areas.

One answer is the availability of yen-based home loans to
non-permanent resident foreigners living and working in
Japan. As we mentioned earlier, Shinsei was an early mover
in this space, and back in 2005 was offering 5-year fixed
loans at just 1% interest. But while there has been no
formal announcement from Shinsei to the contrary, we have
heard that the bank is now less interested in foreigners
and mortgages than it once was. Alternatives include Suruga
Bank and some of the Japanese major city banks. However,
almost all of these loans are for owner-occupied residences.

Several months back, however, the National Australia Bank
(NAB) started advertising the availability of yen-based
loans for Japan-based non-permanent residents. The rate is
2% over the interbank lending rate, which still means
interest under 5%, and they will loan up to 80% of the
property value if the loan is in yen.

Perhaps the most important point is that they will lend to
buyers wanting to purchase investment or holiday property.

Because Japanese real estate prices outside of the cities
have been falling for so long, the rest of the world has
caught up and in many cases, passed right by. This means
that there are some amazing deals in rural Japan. We did a
little trawling on the web, through both foreign and
Japanese websites, to find out what was available. How
about a weekend getaway 3-4 hours from Tokyo in Kusano
village, Souma-gun, Fukushima Prefecture? This quaint
cottage on 105 tsubo (348 sq. m.) of land would swathed in
snow during the winter and be picture postcard perfect. It
is a snip at just JPY3m (US$28,000).

http://tinyurl.com/5h75wv

Moving up the price scale, but still very good value is a
genuine antique minka with a thatched roof, located in an
exclusive part of Hakone, 1-2 hours west of Tokyo. This
home comes with its own natural hot springs and sits on a
third of an acre of land (1,537 sq. m.). It's priced at
JPY120m (US$1.1m). Drilling a new hot spring well alone can
cost hundreds of thousands of dollars and take years to get
permission.

http://tinyurl.com/5uaclj

Another popular destination for residents of Tokyo, Nagoya,
and Osaka is the Hakuba ski resort in Nagano Prefecture. It
only takes 4 hours by train to get there, and the snow is
apparently usually very ski-able — although perhaps not as
dry nor deep as Niseko much further to the north. There
are plenty of small holiday plots and residences for sale
in the area, many of which were built during the land
bubble of the early nineties, and which have since fallen
into disrepair. Check out the listings at:

http://www.hakuba-fudousan.com/

Lastly, if you're looking for somewhere a bit closer to
Tokyo, perhaps even somewhere you could commute from, then
check out this house on a hill overlooking Zushi Bay and
Mount Fuji — fantastic views and sunsets. 2-3 bedrooms,
double car garage, refurbished just this year with modern
appliances and conveniences through-out, all for just
JPY750,000/month (US$6,945/month).

http://tinyurl.com/58qwl5

…The information janitors

I think that would be the case in NSW last time I looked. Stamp duty varies depending on state.

Yes, it is likely your will need to use your house as security and this will have a dramatic effect on future investing. Firstly your house will be at risk if your business fails, secondly the repayments for your loan will effect the amount of income you can buy in the future, and thirdly any equity in your house will be used up for the business loan.

Banks think business is risky, so you may have to pay a slightly higher rate than if you just got a LOC for investment purposes.

Hi Pos

You would be selling your old PPOR to your trust. So your trust would probably have to come up with a deposit – you could lend it some money from your freed up equity of the sale.

If the trust property is negative geared, I would be inclined to use a DT and try to inject other income into it to offset the loss. If you need to claim the loss then I would still use a HDT. It would have to operate as a UT initially, but at least you will be able to have the trust buy back the units later on (CGT implications) and it can then operate as a DT withou having to resell.