That is terrible! The big C is my least favourite lender.

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The gain in all this structuring will be asset protection, income tax minimisation, CGT minimisation and estate planning. The accountant did not mention these issues which are the only puposes in which you would use a trust.

When banks look at lending, they are looking at the whole package. Having a trust should not change anything, but having a hybrid trust with a corporate trustee will make it a bit harder to get finance as the loan will be in a different name to the title holder.

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Generally many lenders are a bit worried about petrol stations as there many be contamination or environmental issues. So probabbly around 65% would be the max loan available. Arab bank is apparently good with petrol stations.

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Generally the max you can borrow is 95% of the value of both properties. so, eg.:

Current IP
Val = $100,000
Loan = $85,000

New = $100,000
Loan = $105,000

Total Valu = $200,000
Total Loans = 190,000

overall LVR = 95%

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Hi Carlin

In some states ppty can be trasnfered without stamp duty if between spouses. But sometimes this is limited to divorces and a court order is needed.

Another cost would be legal fees. So you may have CGT, Stamp duty, Legal Fees, and loan costs – app fees, exit fees etc.

However, it still may be worth it if this could release some money which could then be used to pay down non dectible debt and reborrowed for the purchase of the IP again.

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Cata

Sounds good in theory, but it would probably be very hard to get a loan for something like that. It would be very messy.

Generally the loans will need to to be in the name each title holder. But what you could do is get 3 or 4 splits, with each split used exclusively by each partner. So each can pay as much or as little as they like. However each partner would be responisble for the whole debt. So if 3 of the 4 partners refused to keep paying, the 4th will have to pay etc.

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Yes, LMI is a borrowing expense and can be claimed over 5 years or the term of the loan if you refinance earlier.

Even if you initially lived in the property, you should be able to claim the LMI, possibly 100% of it.

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You should take into consideration your views on rates, but also the inflexibility fixing creates – it may be harder and more costly to change lenders. And this could hinder your expansion.

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Also consider Dale Gatherum Goss. http://www.gatherumgoss.com

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Hi

It is very confusing. My understanding is that in Victoria, the trustee must pay an additional surcharge as well as land tax. But the trust may nominate a beneificary who can pay the land tax on behalf of the trust, and I assume get some relief with the tax free threshold. But a beneificary paying the land tax may not actually be able to claim a tax deduction. see http://www.moorestephens.com.au/main/newsandevents/documents/Land%20tax%20concession%20for%20discretionary%20trusts%20has%20income%20tax%20sting%20in%20its%20tail.pdf

As far as I am aware, the main benefits of a property investors trust may have gone out the window now that unit trusts are considered the same as discretionary trusts for land tax purposes. ie Land tax should be the same in this trust as any other trust. But it may still be worth having a unit trust with the units held by a discretionary or hybrid discretionary trust for other reasons.

There are no annual fees for a trust. A tax return must be done and there are accounting fees for this. But it shouldn’t be too much extra compared to owning the properties in your own name.

WIht companies there is an annual ASIC fee of about $400, and a tax return as well.

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