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]

Steven

Thats the First Mac one. I think notabrokeranymore may have been referring to another 95% low doc?????

Terryw
Discover Home Loans
Mortgage Broker
North Sydney
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Probably not. Mainly for taxation reasons.

See you accountant about this. But basically you should buy you house, and then use this as security to borrow more money to buy the investment.

If you do it the other way, you will be paying interest on your home loan which you can’t deduct.

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

Depends on your situation.

I would put it into my home loan, if I had one. Or a 100% offset account. dpending on what sort of properties you are after, it is probably not enough for a deposit.

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

A discretionary trust can stream the income and/or capital gains to any of the beneficiaries. So you, the trustee, distribute to the lowest income earners first saving tax.

Be aware that the beneficiaries will have to declare this income in their tax returns and the money belongs to them if they decide not the give it to you.

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

Yes it would be possible to buy a house using a deposit from your family. Generally you would need around 10% deposit if you do not have genuine savings.

There are still cheap houses in Sydney. One of my clients is purchasing a 3 bedroom place for $210,000 – a house. The rent probably won’t make it positively geared, but after tax deductions, and depreciation is should come close.

I would think that it would be better to buy something like this in Sydney then some small little house in a mining town, just because it would be positive geared.

Terryw
Discover Home Loans
Mortgage Broker
North Sydney
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If you are buying from you parents, can’t they just make the contract higher?

Terryw
Discover Home Loans
Mortgage Broker
North Sydney
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That is around market price for wraps. I did some with a 20% markup on price and a 3% markup on interest rate.

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

I think you would be walking a fine line there, especially if you are going to be receiving a payment for helping sell a property that you do not own.

If everything goes smoothly you should be right.

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

I think St George are good with smaller units – over 35sqm.

Wide Bay Capricorn also used to do smaller units.

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