Rather than a company, look at discretionary trusts instead.

Terryw
Discover Home Loans
North Sydney
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There are loans out there which do not require genuine savings. These are usually 90% LVR, but I think there are a few at 95%.

Keep in mind that it doesn’t have ot be cash savings, it could be shares, or managed funds etc too.

Terryw
Discover Home Loans
North Sydney
[email protected]

From an interest calculation angle, and offset and a LOC will be exactly the same.

But from other angles they will be different.

eg. by using an IO loan with an offset (as suggested by Steven) you would not be paying down the loan, but would be saving interest as if you were paying the loan down by the amount deposite into the offset. This may help if you were to move properties as you could just take your money out of the offset, leaving the loan balance the same and use this money for you new property. This would mean the interest deductions on your remaining loan would be high, resulting in tax advantages.

LOCs also have higher interest rates, usually, and often have fees attached.

I personally have both, but only use the LOC for business/investment purposes. All my day to day income goes into the offset account.

Terryw
Discover Home Loans
North Sydney
[email protected]

You settle on the property or lose your deposit and risk being sued.

Terryw
Discover Home Loans
North Sydney
[email protected]

Ben

You could move out and rent, but you could also stay put and buy another property. If you rented your home and it was positive geared, you may have to pay more tax, but this could be offset if you are renting cheaply eslewhere.

Also, under section 118-145 of the ITAA you may be able to rent out your home and to claim an exemption from CGT for up to 6 years, if you do not have another main residence at the same time.

Terryw
Discover Home Loans
North Sydney
[email protected]

Cata

Here is a quote from a well known accountant on another forum, dated July 2003:

“I would be very interested to see any stautory law or cases that require a cheque be deposited in the trust account within 28 days on behalf of the settlor.
The problem with depositing money in a bank account is that if the balance falls below $10 then there is no longer a trust.
To be prudent, i recommend that $10 cash be stapled to the deed, but again this is not a legal requirement.

If the trust is challenged it must be proven that the trust was settled with $10. If the Settlor is not able to provide this evidence (eg has passed away) then the trust may be challenged. The settlor can settle the deed with the $10 and then take the $10.

Stamp duty is not due within 28 days.
In NSW i recommend that my clients stamp their deeds within 3 months to avoid paying late penalties.
Again there is no strict legal requirement to stamp the deed within a specified period.

If a deed is not stamped, it may well be a contributing factor in determining and justifying that the trust really exists.

To ensure the deed is established with no scope for challenge, i recommend:
1. Staple $10 cash to deed +
2. Pay the stamp duty.”

http://www.somersoft.com/forums/showthread.php?t=10607&highlight=trust+cheque

Terryw
Discover Home Loans
North Sydney
[email protected]

There is also the ‘Bare Trust’ method.

This involves sitting around with no clothes on and signing contracts.

Oh no, it doesn’t, my mistake.

It is when a trust is formed between two people – the trustee and the beneficiary. The contract is signed in the trustee’s name, and then after settlement title is transfered to the beneficiary’s name. The ATO recognises the owner to be the beneificary and there is no stamp duty or CGT issues when transferred (if done correctly – see your solicitor).

It is especially good when buying properties next door and you don’t want it to be known who the real purchaser is.

Terryw
Discover Home Loans
North Sydney
[email protected]

It could be done if you had about $6,400,000 in useable equity in other property.

Terryw
Discover Home Loans
North Sydney
[email protected]

If included you could claim them as a tax deductions, whereas tenants couldn’t if paid themselves. Therefore if your paying $100 it may only cost you $80 after tax.

Terryw
Discover Home Loans
North Sydney
[email protected]

I enquired with ANZ before about this and they stated could only do 95% to bring the loan upto the original level – can not borrow more. (I have had conflicting advice from them more than once however).

I’ve also heard Royal Guardian can do refinance up to 95%, tho not used them. And also the new First Mac products may also allow this.

Terryw
Discover Home Loans
North Sydney
[email protected]