Major advantage is deductibility of interest from a LOC
money from an offset would not be deductible.

Disadantage of a LOC is that it is at call, not good for a developer, so once it is drawn convert it to a IO loan.

If you can use a IO that can be redrawn and paid directly from the loan account then this would be even better.

Hi Trish

Your solicitor will arrange for the loan to be paid out at settlement unless you instruct otherwise (and have altneratives arranged with the mortgagee).

The definition of a trust is A holding assets for B. Where A and B are the same there will be no trust relationship.

If a tenant sues they will sue the owner of the property – which will be the trustee and if that is you all of your personal assets are at risk. Having a company as trustee can limit liability to the company and trust assets in this regard. but watch out for the liability of unit holders.

If the bank takes possession of the property and sells at a loss your personal guarantee will be called on and your personal assets at risk.

How will you fund the trust with cash? Loan, subsribe for units in the trust or just use the cash. Consider the consequences of each.

What are the stamp duty implications of putting a corporate trustee in.

Also have you factored in land tax?

My strategy with Accessing equity is to use a io loan if it can used toboay directly from the loan account. But if it cant then use a Loc and once drawn convert it to a io loan.

This is more work but avoids the tax risks.

I agree Richard, but it depends on the bank. If you can pay directly from the loan account you would be better off avoiding the LOC option. If you cannot then you run the risk of losing deductibility of interest by borrowing and parking into a savings account and then paying out.

They would look at the building works and the fixtures and fittings. There will be a value to all existing things such as stoves, hotwater systems etc and this may produce tax savings more than the cost of the report.

Some will tell you upfront if they think it is worth it. try BMT or Depreciator.

Sounds like you need to get some serious legal advice. But in the mean time look at unit trusts and companies.

With commercial the risks with tenants are higher than with residential so you would want to more carefully consider asset protection. Paying cash can be done, but would be more risky. A way to improve asset protection could be to pay cash indiretly by having a sepapate entity own the property to the entity that owns that cash – with a private loan agreement.

The owner would generally be a company – whether in its own right or as a trustee. Which one you use will depend on the situation inncluding the land tax issues for the state.

The next property after that should probably be a separate entity for various reasons including asset protection, land tax, etc

If you are going to have people buying in later you need to consider the stamp duty laws including landholder provisions.

You also need to consider the borrowing implications with banks – how to maximise borrowings and issues if transferring shares or units of a trust.

Zen again the answer is no. These expenses do not relate to the production of current income

Do you need an acccountant or a tax adviser (many confuse the two).

Try Darryl who posts on here as RPI.