These properties will probably go up in value again. All good locations. Its a hard decision to make.
Can you afford to hold on to them?
Maybe you could sell one to start with and see how you go???

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Sue the purchaser for the full 10% -and maybe more.

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CT, has been done by many. As long as all valuations stack up, the ATO is not missing out – well maybe by a little bit!

I suppose they could argue that it is a scheme designed to minimise tax, and they may have a point – div 4a. But tax is not the only reason, there are asset protection issues and estate planning issues as well.

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There may also be a problem if you both were to die togther – how is it determined who died first?

it seems the general rule is it is presumed that the oldest died first unless it can be proven otherwise.

You may be able to specify in your wills what will happen if you both die together.

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Unfortunately everyone on title has to go on loan,

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Hi CT

With a hybrid, the individual usually claims the interest, and the trust claims the rest.

With a normal discretionary, the trust claims all expenses – which is often more than the rent, so a loss results.

I think hybrid discretionary trusts are very good for negative geared property as negative gearing can be utilised. This may not be a problem with +ve cashflow properties, but there are still reasons to use a HDT for these too.

With a hybrid you may have access to the refinancing principle. I don’t fully understand this concept, but it is somehow possible for the trust to borrow money to buy back the units, and for the interest on this borrowing to be deductible no matter what you use the money for.

A trustee may be liable for the debts of a trust where there is a shortfall – not good if the trust is sued. That’s why having a company as trustee is preferred. But having assets in a trust is still better than owning them in your name.

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If you refinance you will be hit with around $4500 in exit fees. Your rate is not too bad, so it may be better to wait a bit for some more equity to build up – generally refinances are only available up to 90% LVR. Oh, and you would be up for LMI again too!!

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My understanding is that if your brother were to die before you, you will become the sole owner. He cannot will his share to someone else. His interest in the property will disolve at death.

Better confirm this with a solicitor. Maybe there is a way around it by you both agreeing to make wills with each other’s interests taken into account. eg. he dies first, you get the property, but you agree to donate 50% of it to charity when you die.

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If you want to keep the unit as an investment, probably the first thing you should do is to stop paying extra off the loan, and to change it to interest only.

You want to keep all extra funds for your new home – as it is non deductible.

btw, I think you can change your username – just click on your name and you can do it from there.

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A joint venture is just two or more parties doing business together. These sorts of things are best done with somesort of document outlining the roles and responsibilies of the parties. Look out for what sort of things could go wrong, and paln for them. eg. what if one party wants out in year 3, do you sell the property, sell your half to the other or sell to a third party. These are the sorts of things that can cause rifts between the parties, and you don’t want this to happen, especially with family.

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