simang wrote:

Hi Terry,
We are looking for someone who is able to tell us the best way, for our personal situation at the time, to purchase each property for maximum benefit. I know there are pros & cons for purchasing property in your own name, as well as purchasing through a trust – I’m just not sure which way to use when.
As it would all have tax implications, I’ve assumed we would need an accountant to help us understand which vehicle is better when. Happy to hear any feedback if I’ve got it wrong, or there is a better way to go?
Thanks,
Angela.

What about a lawyer. Lawyers can advise on the tax aspects as well as the legal aspects of structuring – how to own property and how to structure loans.

Examples include trusts, companies and SMSFs in addition to joint tenants, tenants in common etc.

A simple example is a non working spouse lending money to the working spouse to buy a negatively geared property. This can divert income to the non working spouse who will pay little to no tax and divert expenses to the working spouse who will maximise their deductions.

Make sure you have your loan structure right, especially with retirement coming up.

You could also keep things as is and just build on your dad’s land. You might be $100k short now, but you could possibly borrow from your dad or do a bit of owner building.

If your dad dies first you could then inherit the land. If you die first you dad gets a house. You could have an legal agreement drawn up – common in granny flat type situations where a parent sells and uses proceeds to build on adult child’s land but this is in reverse and on a bigger scale.

What about the land tax in NSW!!

Meddedf

You should get some tax advice before proceeding. By borrowing and parking money in an offset account you could destroy the deductibility of interest on the loan.

An make sure you do split the main loan with the increase, otherwise you will end up with a mixed purpose loan and you will be throwing good money away.

Sounds good Richard

If Richard’s system is not for you then you could possibly get your mum to repay you what you have lent her (will only work if she was paying extra off the loan). Get the loan done and then you could gift or lend back to mum. Another option is for a family pledge type loan.

What state?

Seek legal advice as generally stamp duty payable again as it could be considered a subsale. In VIC perhaps not.

1. Not to you. It could be deductible to the trust if you are on lending. If you are just paying the trust’s loan it won’t be deductible at all.

2. No. You dont own the property so cannot claim depreciation. The trust could claim depreciation.
If you are living overseas who is the trustee of the trust? If a company is there a resident director? If no company and you are trustee you may have a foreign trust for tax purposes. Better get some advice on this as foreign trusts are taxed differently and you could be breaching the corporations act

3.Think carefully about structuring the ownership and structuring the loans, well before entering a contract.

In Vict it is possible. s44 Duties act from memory. Not in other states.

Yes, possible.

Change of owner means new loan applications.