I don’t invest in NZ, and don’t know much about tax there, but Wouldn’t you have to declare the income in Australia anyway if it was in your own name? A Trust may give more flexibility in distributing it to the lowest tax paying beneficiary, or even to a company in NZ and leaving it there. And what are the costs to transfer it to a trust – you may have to pay CGT here.

Terryw
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resiwealth – I’ve learn’t my lesson.

Only a fool learns from their own mistakes, a wise person learns from the mistakes of others.

Terryw
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Similar to residential. It varies alot, with higher interest rates and lower LVRs – No LMI available, max LVR around 70%, can go to 80% at higher rates. valuations are harder to do, cost more and can vary a lot. very hard to get commerical finance in non city areas.

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I also have wrapped to someone on a disability pension. It is also a long term thing with a quick refinance very unlikely. My ‘tenant’ has been behind in the rent, and it would be very hard for me to kick her out as I sympathise with her. I could get tough and legally do it, but…

That is why I would never do it again.

Terryw
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You may be able to borrow up to 95% of the purchase price, depending on the location and cost. Having a higher rent would help you qualify as well.

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Not much you can do. If they don’t settle soon, they will lose thier deposit and could possibly be sued. They could onsell to you, and have a simultaneous settlement, but you would have to pay stamp duty as well. There would be no way (legal) to avoid stamp duty, unless maybe the vendor rippued up their contract and you/someone signed a new one. But they would probably only do this if the property had dropped in value.

If it has increased in value substantially, you could lend them purchaser the money to settle or to qualify for a loan and then onsell with a profit sharing. But a lot of these places are not being valued up to purchase price.

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I would suggest, you form a trust, with yourself as sole trustee or sole director of the trustee company. Get the loan in your name with a formal loan agreement drawn up, with you friend lending money to the trust for deposits. Also have a joint venture agreement drawn up outlining profit sharing, risk sharing etc. Then you can distribute profits to the beneficiaries – you and him/her, maybe as trustees of your own trusts.

But this way you will be taking all the risk, – whihc may be mitigated by your other agreements. eg he/she will compensate you if anything goes wrong and you ‘go down’. And this will affect your borrowing capacity, but not his/hers. Which could be good because you can then later form another trust in his/her name and go again.

Or

You could simply borrow money from your friend and do it on your own.

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1. If your main residence is rented out, after you first live in it, and sell it wihtin 6 years of renting it, and have no other main residence, then it may be CGT free. There is no requirement to live in it for 12 months first.

2. You can claim building allowance on any improvements and depreciaiton on any fixtures for a property you rent out.

3. Not in Australia.

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Felicity

That is a good idea. That way you could encourage them to refinance rather than drag it on.

BTW, what do you prefer? The long term cashflow or the quick exit approach?

Terryw
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Some also charge a settlement fee and lenders legal costs.

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