There are probably only 3 broad types of loans:
Principle and Interest (PI)
Interest Only (IO)
Line of Credit (LOC)

Terryw
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With the same bank whether you have a 100% offset account makes no difference to the interest rate.

Many lenders do have no frills products with cheaper rates, but no offset. But these days most of the banks offer discounts on professional packages which brings the standard loans down to the same rate as the no frils, with all the added extra.

But there are some non bank lenders who do have very cheap loans without the offset accounts.

Terryw
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Using a trust generally makes no difference at all to the ability to borrow. The only exception that I can think of is ANZ’s Low Doc loan which is not available to companies or trusts.

There can be some problems when using a Hybrid Trust. This would only arise if you have a corporate trustee as the title will be in the company name, but the loan needs to be in a individual’s name. SO a third party guarantee is involved. Not many banks would do this. If the trustee and the unit holder is the same, then there should be no problem.

Some lenders can also have problems with unit trusts.

I don’t think you will get an easier book on trusts than ‘Trust Magic’. Start with that and then start surfing the net. Another one accountant’s use is “Trust Structures Guide”. Costs about $350 though!! But it is available in some university libraries. This is probably the best book on the different trust structures with flow charts helping to explain which one you might need. But it is not written from a property point of view. More business orientated.

Terryw
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Hi Opp

I agree that people need to verify things for themselves. So it is great when people can back up their argument with a useful refenece.

However, in the document you refer there is nothing on page 11 that refers to interest on funds borrowed for legas etc. Certainly legals are a capital expense and cannot be claimed against income (only CG).

The arguement here is if you borrow to pay legal expenses, stamp duty, etc is the interest deductible.

I say it is.

I can find no reference, maybe because it is generally accepted practice that interest on borrowings for investments is deductible. After all a house is a captial expense. You cannot pay $200,000 for a house and claim this $200,000, but you can borrow to buy it and claim the interest.

That’s my take. And I am no accountant either.

Terryw
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Offset accounts are best, – these accounts need to be in the exact same name as the loan they are offset against.

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Dacium

Are you sure? Can you point out anywhere on that page where it says the interest on borrowings for expenses will not be deductible?

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You cannot normall force them to sell their share to you, or the sale of the whole thing. Do you have a joint purchaser’s agreement?

You probably need to speak to a soliticor, you may need are court order to force them to sell.

What about talking to ther person and trying to convince them to get out?

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I am not an accountant, but think that you can claim the interest on any borrowings relating to the IP, and that would include purchase costs.

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I made a post here a few days ago, but looks like it didn’t get through.

NSW OSR’s take on trusts changed a few months after the PIT trust was released. I think they were marketing it as a way to reduce land tax, and I am not sure if this is still the case or not.

All discretionary trusts would get the 50% CGT discounts as the incomes are passed through to the beneficiaries. If the beneficiary is an individual, the discount should be available if the trust held the asset mroe than 12 months.

Terryw
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Or approach a bank in the country where the property is located.

Terryw
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