I had a tenant do a runner owing money, VCAT ordered in my favour stating that they owned me the money and had abandoned the property. I put the matter with a private collection agency and they are hunting down the offender.

Terryw
Discover Home Loans
North Sydney
[email protected]

I think you will find it very difficult to find a FP that understands wraps. you might want to just ask your questions here or even on the Vendor Finance Assn Website: http://www.financewraps.asn.au

Terryw
Discover Home Loans
North Sydney
[email protected]

Bearhunter

With capital growth, the tenant in a LO may not need to come up with anymore downpayment to cash you out. Even if there is no capital growth, the rent credits may enable them to cash you out – but would take much longer.

Terryw
Discover Home Loans
North Sydney
[email protected]

It is also good to run a business thru a trust. So if you are going to be renting out your houseboat, then it would be an idea to have all the rent diverting into the trust.

Then if you earn, say $10,000 per year profit you culd distribute that to tow beneficiaries on low incomes and pay no tax at all.

Terryw
Discover Home Loans
North Sydney
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Yep. There is a tax ruling out there (somewhere??) on a family home being held via a trust. For tax purposes it cannot be classed as your main residence and will therefore be liable for CGT and land tax. You would also be required to pay market rent to the trust/company which in turn may have to pay tax on this.

If it is your tempory main residence it may be worthwile – you could negative gear it for a period and then move on and buy your final main residence in personal names and retain the existing one in the trust structure- reaping tax and other benefits.

Terryw
Discover Home Loans
North Sydney
[email protected]

I have a client who purchased there. The valuation report stated that prices had risen rapidly recently-due mainly to out of town investors and that there was a good chance of a price drop in the future. This was just the valuers comment, but valuation came in at purchase price.

Terryw
Discover Home Loans
North Sydney
[email protected]

Hi Marc

The trouble with companies is they don’t get the 50% CGT discount for assets held over 12 months. Not many people buy and sell a property within 12 months, so most would qualify for the discount. So even if you were on the top tax rate of 48%, this would drop to 24%, beating company tax.

A better way would be to use a trust, and the profit could be distributed to the lowest income earners saving even more tax.

BTW, Capital gains tax is a federal tax, so he would be paying Costello.

Terryw
Discover Home Loans
North Sydney
[email protected]

Solicitors sometimes don’t understand how banks work. Bank’s will want a personal guarrantee from the trustee or the directors of the trustee company. So putting a friend or relative in as trustee probably wouldn’t be a good idea unless they are willing to give the guarrantees and sign various documents.

And then as you mentioned, this may effect their centrelink entitlements etc.

Terryw
Discover Home Loans
North Sydney
[email protected]

What about selling to a trust? that way you could ‘keep’ the property and release some money to pay off your home loan. Stamp duty and CGT may still be payable, but you would save on agent’s commissions.

Terryw
Discover Home Loans
North Sydney
[email protected]

I am not an accountant, but have wrapped myself and I have used a discretionary trust. Since you will be making positive cashflow, there is probably no need to use a hybrid trust, and I can see no point in using a unit trust (unless in partnership?).

Using a trust would not really have any effect on the end purchaser other than protetion of your assets against external creditors.

Terryw
Discover Home Loans
North Sydney
[email protected]