You can use a trust to own your personal home, but it is complicated and you have to be careful. The ATO have a ruling out about renting from your own unit trust, and they don’t like it!

You could possibly make short term tax savings, but long term owning your home in a trust is not beneficial because:
– maybe up for land tax (not in QLD apparently)
– up for CGT if you sell
– you will eventually be making a profit on the rent and may have to apy extra tax.

Benefits
– asset protection
– tax savings
– could claim depreciation, furniture, etc.
– if you only intend to live there for a few years, it could be a good idea.

Terryw
Discover Home Loans
Mortgage Broker
North Sydney
[email protected]

Hello Robert

I am not sure what you are trying to say here.

What I said is correct.

If you have money in an offset account and withdraw that money, the extra interest incurred on the loan would only be deductible if the loan was already for investment or business. There would be no accounting problems as the loans/accounts are totally separate.

If you are using a LOC as a home loan, then withdrawing funds for a mixture of personal and business use could make things messy

Terryw
Discover Home Loans
Mortgage Broker
North Sydney
[email protected]

Sorry, I meant that CGT may be payable on the sale of your shares.

Terryw
Discover Home Loans
Mortgage Broker
North Sydney
[email protected]

Dodgee

If you are using a new company to borrow, it is generally not much harder than getting a loan in your own name. The directors will have to give personal guarrantees, so the lender will look at their income etc.

It doesn’t isolate you from debt. If the company cannot pay the loan, then the bank will come after you personally.

ps. I would not recomend anyone use a company to purchase property unless it was a trustee company acting for the trust.

Terryw
Discover Home Loans
Mortgage Broker
North Sydney
[email protected]

I’ve got something like that myself. I would just hang on to it, renting it out. Acerages are getting harder and harder to find, pushing values up faster than average.

Terryw
Discover Home Loans
Mortgage Broker
North Sydney
[email protected]

If you are going to move into your unit, you could sell the shares and put the money into an offset account attached to the unit. You could then buy them back (using a discretionary trust would be a good idea)by increasing one of your loans and maybe using a margin loan. This will help you convert non deductible debt.

Then when you move out of your unit, you can take the money from your offset and put it onto the loan of your new place.

You will probably have to pay CGT, but it may be worth it.

Once you have done that, you could then start buying more property.

Terryw
Discover Home Loans
Mortgage Broker
North Sydney
[email protected]

Why would anyone want to use a mobile lender from a bank? Naturally they only have products from one lender! Most people wouldn’t bother and would use a broker who would have access to 30 or so lenders – its the same hassle.

Terryw
Discover Home Loans
Mortgage Broker
North Sydney
[email protected]

Hi Jules

I think you still misunderstand. The guarrantee only relates to the loan, you can still be attached from other angles, and a trust helps protect you from these.

Terryw
Discover Home Loans
Mortgage Broker
North Sydney
[email protected]

Bluestone have a new 95% low doc too:

– Rate 10.79%
– Owner Occupied only
– Clear credit report
– Minimum population requirements of 75,000 within 10kms of the security property
– Max loan is $350,000
– Must have held an ABN and be registered with GST for 12 months or more.
– No LMI

Terryw
Discover Home Loans
Mortgage Broker
North Sydney
[email protected]

Dunno. What sort of investment was it?

Terryw
Discover Home Loans
Mortgage Broker
North Sydney
[email protected]