Hi

You can can negative gear your own home, but beware.

You may be able to save a few hundred or even thousand in the early years, but this could expose your home to CGT which could cost you much more in the long run.

Hi

There are a lot of differences between a unit trust and a company. I think the main one is the limited liability of the company. A company is a separate legal entity so if sued it is treated like a 'person'. It is the company that is sued and if the company does not have enough assets to meet creditors it will go down, The directors and shareholders personal assets are not at risk. (director's assets can be at risk if they act illegally).

With a trust, it is not a separate legal entitly (though is treated as one at tax time). When a trust is sued it is the trustee that is sued. The trustee is usually covered by the assets of the trust, but if these are not enough, then their personal assets can be at risk.

So if trading a company is usually the preferred structure.

Another aspect is the public reporting requirements of a company. The details of a shareholder, or director must be reported to ASIC and this information is publically searchable – including name, address, DOB, place of birth etc. With a unit trust the unit holders are generally not searchable as the deeds are not registered.

You should get the depreciation booklet from the ATO – it should be available for download.

Sorry, a No Doc loan is a type of loan in which the lender does not ask about your income. They just ask if you are self employed, have good credit and have a deposit. Rates are slightly higher than normal loans though.

Michael Yardley's book is good as is Peter Spann's – forget the titles sorry, but the best resource would be reading as many posts on these forums as you can.

The St.George Foreign Currency Home Loan offers customers who may be residing either within Australia or offshore the ability to borrow funds in a foreign currency, provided their main source of income is denominated in the same foreign currency, creating a natural hedge for loan repayments.

Foreign currencies available are:

• Hong Kong dollar (HKD)
• United States dollar (USD)
• Singapore dollar (SGD)
• British Pound Sterling (GBP)
• New Zealand dollar (NZD)
• Euro (EUR)

I would never recomend paying any money into a LOC at all – except to pay the interest. All money including wages and rents should go into the offset account.

But in your cash you have no personal debt so you could pay it into the LOC – but this will make you lose flexibility if you ever wanted to get the money out for personal reasons.

I personally would get all income into the offset, maybe pay expenses with one visa card and then borrow to pay this. All other property expenses would be taken from the LOC. I wouldn't bother about multiple accounts myself. I would just pay the interest on the LOC.

Once you get the offset account up to a certain level you could possibly look at paying down the LOC – but only if you are sure you will never need the money for personal stuff.

You will also be paying a 0.1% extra on the LOC.

To make it simple this is basically what you do.

You add up all expenses related to the property.
Then you add to this non-cash expenses (These are things you can claim without actually paying for them there and then – eg. travel, borrowing costs, depreciaton of fittings, deprecriation of building etc).

This gives you your total expenses.

Profit is income minus expenses. So your rental income – the above two lots of expenses.

If the figure is negative you can minus this from your yearly income and you will get a tax refund at the end of the year, or weekly if you fill in the variation forms with the ATO.

You could rent in the area you wish to live in. You may be able to claim negative gearing on the old house, saving tax and structure it so that you can avoid CGT on this house even though you are renting. The rent on the new place should be much cheaper than what you would be paying on a loan for the same property.

Or you could sell the old one and buy the new. There would be a lot of costs involved.

Or you could keep the old one and buy the new one as well. The trouble with this is you would probably need to borrow 105% of the new place and pay lots of interest which would not be deductible

Offset accounts cannot be set up against LOCs – the Portfolio with St George is a LOC.

I would only use the LOC for the account to be drawn down on for investment expeses and deposits. These should be set up any spare equity.

Set up a IO loan for the main investment loans and connect a 100% offset account to this. All money should go into the offset. Don't pay any money into the LOC or it will be locked away with potential tax problems when taking it out again.

All expenses should probably be paid for by borrowing money from the LOC. The cash you would have used can be stored in the offset account. This is not a big deal as you don't have any non-deductible debts, but it may be a good idea if you want to upgrade your main residence later – ie take out a new loan to buy a more expensive one.

You cannot set up a credit card on the Portfolio loan. These are just set up in your name and you can chose how to pay it as you like. If you are using the card for just investment/business expenses then you could borrow from the LOC to pay for it.

No real reason to set up a savings account as you will be using the offset account for this.

LOCs can have cheque books which come in handy when paying deposits etc. You could probably also get a cheque book linked to the offset account for the personal stuff.

With the portfolio the LOC can be split into up to 10 accounts and the limits on these can be changed later. So you can readjust things as time goes on and your circumstances change.