Setup time;
5 min on the net to 1 week or so with an accountant.

Cost
Accountants generally charge around $1200+ for the trust deed. I don’t know of any solicitors selling trusts, especially HDT with the tax knowledge required.

Other
Bit of advice is usually included in the accountant’s fee, as is ABN, TFN applications etc. add $200 for stamp duty in most states and another $800 or so if you want a company as trustee.

ONGOING
-Same as if you owned the property in your personal name

Cost
– Tax returns need to be prepared for the trust and company trustee (nil return) if you have one. Some accountants charge around $1200 for this too, others charge a fee depending on how much the trust holds, eg, a set fee per property. In this case you would be paying accounting fees anyway if you held the properties individually.

No need for a solicitor, unless you need legal advice.

May also need a few hundred extra for ASIC fees if you have a company. $400pa I think.

Terryw
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Hi Anzac

It can be costly to sell a property. Did you take into account the fees (agents, solicitor, loan exit fees – these will be high on a no doc). Plus your father may have to pay CGT and you may too, if you are classing Brisbane as your main residence. But the CGT should be minimal if there is only a small gain.

But if you are struggling to pay these existing mortgages, then you may not be able to afford to buy another.

Terryw
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yesfella

That’s alright if you got the same quality service, but what if it is actually costing you more in paying extra tax or potentially extra tax in years to come.

Terryw
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Terri,

Could you live in either property? Maybe you could move into one and sell the other?

If you do have to sell, maybe you should consider selling each in a different tax year.

And if you are getting the pension, watch out for any effects this may have on your entitlements.

Terryw
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I would be inclined to put extra money into a 100% offset account in case the future plans of your land changes. Buying a unit is probably not a good idea as it would be much cheaper to rent – my opinion only.

Terryw
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I sacked my accountant because it always took him about 6 months to do my returns and he didn’t know his stuff. I now just do it myself.

Terryw
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Well put Simon

Essentially that is what is happening.

Terryw
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Sounds correct David. 80% of Current value less existing loans

Terryw
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Have a look at http://www.lawcentral.com.au

You can form a company there for $99. (ASIC also charge a fee of $400). There are lots of tips and bits of information on that site.

Company Law and taxation is complex. Lots of stuff to learn and consider – eg heavy responsibilities of directors, rules on insolvent trading etc. You can get into big trouble if you don’t know what you are doing, especially if other people are involved.

The greatest thing about companies is the limited liability factor. Vicarious liability means if you are acting for the company and do someone wrong, the company is liable (usually). Also the companies debts are separate from your own – unless you give personal guarantees.

Generally there are more expenses you could claim, or the company could claim, then if you were doing something on your own.

The ATO is aware of people reducing their incomes by using a company so they now have strict rules called the alienation of personal services income. This can mean that even if you are using a company, the ATO can deem the income to be your own, not the company’s, unless certain rules are met.

Terryw
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Generally you should probably just get a LOC on your property and keep the existing loan separate.

You then use this LOC to pay for the 20% deposits and stamp duty costs etc for each new investment purchase.

Terryw
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