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Yes. It is just like buying a unit off the plan.
One of my clients became a millionaire overnight (about a year). He purchased over 10 blocks for $40,000 using small deposits. A year later they were selling for about $180,000 each.
Just bear in mind, if you are going to sell it, you won’t get the deposit for the purchaser, or the profit, until the final settlement.
Terryw
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Mortgage Broker
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[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
You can only get the FHOG once for one proeprty. If there are mulitple units on different titles, then you will only get it on one of the purchases. Your girl friend should be able to get it on one of the others, but you must buy separately to each other.
Terryw
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Mortgage Broker
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Mine are all positive geared, except for a land loan. What I do is pay everything from a 100% offset account linked to another IP. I put all rent and income into that account. And I pay interest on the LOC which was used for deposits from this account.
Terryw
Discover Home Loans
Mortgage Broker
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Try the local papers, and look up the vendor finance association website. They used to have a page for people advertising their services.
Terryw
Discover Home Loans
Mortgage Broker
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
You generally need around 5% deposit and around 5% for closing costs such as stamp duty. But it is possible to get 100% loans, and if you are a first home owner, and you are buying a place to live in, then you will get a grant of $7000 and stamp duty exemptions, bring down the costs a lot.
Terryw
Discover Home Loans
Mortgage Broker
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
try
http://www.mintgroup.com.auTerryw
Discover Home Loans
Mortgage Broker
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
If you are planning on buying a few properties, then it might be worthwhile setting up a trust to start. Any accountant could set one up, but there are many out there who do not have a clue. Try http://www.gatherumgoss.com for a good accountant who also has a book on trusts for sale.
Terryw
Discover Home Loans
Mortgage Broker
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Excellent idea Derek!
Terryw
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Mortgage Broker
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Stamp duty would be marginally higher, but CGT wouldn’t be any different if done correctly.
Terryw
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Mortgage Broker
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
I use a LOC on my PPOR. But I do not deposit incomes etc in there. I use it merely for investment expenses and deposits.
Terryw
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Mortgage Broker
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Many investors use trusts, but there are some out there with a fair few properties who only use their personal names. It seems some accountants do not understand trusts at all.
I would keep on doing research on trusts – it takes a long time before the ‘penny drops’.
Terryw
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Mortgage Broker
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Yes, I was suggesting 20% above what you pay for it. But you can vary this as you please. Some people believe you should not be making a profit when onselling a property. But you have to account for costs such as stamp duty and make a profit or it would be pointless.
Terryw
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Mortgage Broker
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[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Sounds good in theory. I have examined the ‘throery’ of writing covered calls, but in practice I have heard that it is hard to make that much money as expected.
Just make sure you get a loan agreement drawn up. This will help you claim the interest and also clearly outline the terms of the borrowings from your dad.
Terryw
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Mortgage Broker
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Maybe get a professional in. That way if something happens, their insurance should cover it,.
Terryw
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Mortgage Broker
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
OK Richard. They seem so close from here!
Terryw
Discover Home Loans
Mortgage Broker
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
No.
What is someone sues you for farting in an elevator, and you go bankrupt. Your trust assets will probably be safe.
If you decide to stop paying the trust loan, then the bank will come after it, and then the guarrantor if there is not enough. This is expected, and fair.
Terryw
Discover Home Loans
Mortgage Broker
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
I am sure they will change, but you can’t sit about worry about things that haven’t happened. Trusts are still an excellent way to hold assets and will probably continue to be.
Terryw
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Mortgage Broker
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[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Hybrid trusts are a mixture of discretionary and unit trusts. They work well because the unit holder can borrow to buy the units in the trust and claim the interest against their own personal income. This effectively allows negative gearing using a trust. This is not normally possible as trusts cannot distribute losses.
Terryw
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Mortgage Broker
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
In that case, put it in an offset account against your exsting loan. Keep saving to add to the deposit on your next one. Maybe you can increase the existing loan to access equity to get the deposit faster.
Terryw
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Mortgage Broker
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Asset protection is due to you not owning the asset. You are holding it on behalf of the beneficiaries. If you were to be sued, the trust assets would (probably) be safe. So even if you went bankrrupt, you may not lose these assets.
Tax advantages are due tot he fact that the trustee can choose who to pay the income to each year. eg. one year a wife may be off work after having a baby, so all of the income can go to her. The next year, she goes back to work and the husband takes a break, so all the income can go to him. The first $6000 will be tax free. If you held the assets in your name, or in a company this would not be flexible.
Estate planning. When you die, you may leave your investment properties to your children. This may trigger CGT to be payable. If a trust held the assets cannot be willed at death. The trust is just handed over to the new appointer and trustees.
There are costs to setup a trust – from $275 to about $10,000. There may also be yearly costs for extra accounting work and ASIC returns etc if a company.
Terryw
Discover Home Loans
Mortgage Broker
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
