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I would never manager my properties either. I think i would find it too hard to put up the rent once you get to know the tenants – which you would, as they would be ringing you a fair bit.
Terryw
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Have a look at the recent post on ‘flipping’
Terryw
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Hopefully by the time you sell your house, the new property will have gone up enough for you to ‘repay’ the 20% securred against to be paid back with money fully securred against the investment property.
Terryw
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I agree with Mick
You can shift it, but can’t claim it. Unless,,,,
You sell the property to your trust, or if owned by you and spouse, one of you buys the other out, borrowing money to do so with the proceeds going into the PPOR loan. But there may be CGT and stamp duty payable.
Terryw
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Louise
Thanks for posting that, it looks good.
BTW, The cost is $2200 or $500 per session (day long?)
Terryw
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You shouldn’t use a company unless it is as trustee for a trust. You lose too much CGT otherwise.
The main advantage in using a trust for your PPOR is asset protection. For tax reasons, you would save a bit early on, but in the long run you would be up for tax on the rent when it becomes positively geared (which it will as rents increase) and then CGT when you sell. Both of these could be avoided if bought in your own name.
If you are only planning to live there for a few years, then it may be a good idea.
check out http://www.chrisbatten.com.au
Terryw
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It can get complicated at tax time when working out interest portions. Have you looked at a Tax Ruling that covers poritoning of interest?
eg. TR 2000/2. Income tax: deductibility of interest on moneys drawn down under line of credit facilities and redraw facilitiesTerryw
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So you mum paid cash for her half by borrowing against her home.
If you increase the loan, that is fine, but if you default for any reason, then they will come after either one or both of you to make the repayments, if you can’t and mum can’t and you have no other assets then your mum’s home may be at risk, even though it is not used as security.This is all very unlikely to happen. Property values would probably have to drop for a huge shortfall like this.
I cannot see how you setting up a trust would benefit this situation in anyway??
Terryw
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Signing ‘and/or nominee’ would not help you get out of stamp duty in most states – unless you had a written agreement with in nominee before you sign the contract yourself (In Vic). I beleive it can’t be done at all in NSW or QLD unless the nominee is related (eg your spouse or your ocmpany).
If you want to avoid stamp duty, you could just charge a fee to the person you introduce.
If you want to sign the contract and then onsell, there is no need for finance at all if you can arrange an immediate settlement. ie you settle on the purchase and then immediately onsell to the new buyer. YOu just have to watchout if your buyer can’t settle – as you will have to. (then you would have to chase the buyer for non settlement).
Talk with your solicitor.
Terryw
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I am very wary of investing in small towns, but would like to point out that some tenants in the more expensive properties can be worse than the cheaper ones.
Terryw
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if its hard to get finance, then it will be hard to sell. this would limit price increases.
Terryw
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It won’t work in a discretionary trust as losses cannot be offset against other income. So the trust would need other income or your losses would just sit there until the trust made income in the future.
The ATO has also looked at this structure using a unit trust, have a look at:
TR 2002-18 – “Income tax: home loan unit trust arrangement”
Available from:
http://law.ato.gov.au/pdf/tr02-018.pdfTerryw
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You could do basicaly whatever you can negotiate. Maybe 0% with a higher interest margin would work better in some cases, or a 40% with no interest markup.
Terryw
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Ian
Brokers can order there valuations directly for ANZ (from an approved list). If the client isn’t happy, another can be order through a different valuer from that list (at clients expense).
Terryw
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Jaffa
It the wrapper has already sold the property to the wrappee, then you won’t be able to purchase the property until they have repossessed the property. Is this the case?
Terryw
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You either buy it or introduce it to someone. You ma have to be licenced in some states to receive a fee for introducing property.
Terryw
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Hi
In your example, it would generally be marked up to $120,000.
The value on cashout doens’t matter (to payout costs), contracts are exchanged on the $120,000 price and it reduces from there, depending how much the wrapper has paid in repayments + interest.
Terryw
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Must have been a mullet!
Good work
Terryw
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Rob, what sort of haircut did you have back then?
Terryw
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Thats a hell of a payout penalty!
Terryw
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