hi KW

You should talk to a good accountant about setting up a trust. Since you have some cash, you could gift that to the trust after it is settled and should discuss the consequences of this with the account – you could loan it or gift it.

Since your wife is not working, I assume she earns no income, so you could distribute income to her – up to $16,000 pa without paying tax. Future children could be beneficiaries too and they would be entitled to $2600 pa without having to pay tax. So if you had a wife and 2 kids with no other income that is $20,000 per year tax free. If you had a $20,000 pa investment income in your own name you would pay close to $10,000 in tax!

Well worth the set up i think, and we haven't even considered the asset protection issues.

And as Richard said, i can't think of any lender that charges more for trusts. If you can qualify for finance on your own, having a trust will not make things harder – in fact they can make qualifying for finance much more flexible down the track.

Daaussie

Super is still, I beleive, not able to be touched by creditors, if you go bankrupt – unless you have been deliberately pouring money in to avoid having to pay creditors. Trusts and Super (which is a trust) may not be 100% safe, but much better than your own name. There are also tax benefits too.

There is plenty on the ATO site. Maybe you can try searching for 'double tax agreements', 'non residents' etc

eg.
http://ato.gov.au/large/content.asp?doc=/Content/60937.htm

I remember reading a little article many years ago saying property growth rates were misleading for a number of reasons including the fact that people are constantly adding value to their properties. So a property purchased for $200,000 may sell for $400,000 10 years later, but they could have redone the kitchen and put in a pool and spent $100,000 on it. But the figures will just show it has doubled in value.

If you split the block into 2, then each half would have a cost base of $150,000, so there would be a capital gain of $150,000. But if the split is not 50/50 you may be able to vary the figures.

Also, if you bought the land with the intention to sub divide and sell, then CGT may not apply. It may be the profit is just straight income.

have a look at http://www.bantacs.com.au there are heaps of pdf booklets there including one good one called "How not to be a property developer"

You would probably have to report in rental income and expenses on your tax return both here and probably over there too. If there is a loss here, it should be able to be carried forward to future years so you can offset future income.

its a complex area.

I am confused – why have you based it on a $50k loan when it is only $387.

7% more is not too much, you will be saving interest by keeping your money in your account longer too. It you have an offset account you could be saving more like 8.7% pa each month plus interest saved on the home loan is pretax money too.

Then there is the opportunity cost – if you had more money available you would be able to invest more and maybe make an even higher return.

But remember it is just a few hundred dollars too – so we are only talking a few dollars saved each year!

St G have a 100% loan with an option of paying no LMI but with a higher rate for 3 years. I beleive it is still available but you will need at least around 12 months full time employment to qualify

Hi

These are probably "lease to own" type deals. You are essentially purchasing an option on the property with some of the rent money coming off the purchase price.

eg. The property may be worth $200,000 now. They sell you an option for $2000 with a promise that you can purchase the house for $250,000 in 5 years time. You pay $300 pw rent, but market rent is $200. The $100 extra per week comes off the purchase price = $5000 per year = $25,000 after 5 years. So you may be able to buy the place for $225,000.

The person buying the property may be thinking the property prices are going to jump and it may be worth $300,000 in 5 years. they could still get the place for the agreed sum.

The person selling the property may be thinking property prices are going to stay flat for 5 years, it may be only worth $220,000 at the end of the lease and they will not buy it. The seller would get the extra rental income paid plus the $2000 option fee.

Usually these deals are more for owner occupied renters. it is up to you to negotiate with the seller on if you want to sub lease it out or live there yourself. you can also vary the terms, rent, option fee, renewal period etc.

I think these can be a good deal for the renters.

As a guide, you can generally borrow approx 5 to 7 times your gross annual income.