FW

Have a look at Adelaide bank.

I think the problem may be with the way the cotnract was structured, as Lucifer has said. May be too late now??

Terryw
Discover Home Loans
North Sydney
[email protected]

Also bear in mind, if you were to sell the property or to refinance within the fixed period, there could be very high exit fees, depending on the rates at the time.

Terryw
Discover Home Loans
North Sydney
[email protected]

The deed is usually worded so that any of your relatives can be beneficiaries.

Non residents can be beneficiaries, but there are special tax rules for non residents so they may be charged higher tax – about 30% I think.

Terryw
Discover Home Loans
North Sydney
[email protected]

Wrappack. It would be about 10 to 12%

Terryw
Discover Home Loans
North Sydney
[email protected]

Hi

I agree, it is capital growth that will make you rich. Even getting $70pw cashflow from a property is not much if it doesn’t increase in value.

It would be great if you could get both, and sometimes you can.

And you may not have to wait 10 years for growth. I know a few people who’s properties have doubled in 12 months.

Terryw
Discover Home Loans
North Sydney
[email protected]

Hi Scott

There is no reason you have to change title just to refinance. It is up to you as a personal decision.

Changing title means you a actually selling half of the house to your partner. SO you may need a solicitor, and will have to pay stamp duty on the value of the share transferred. If it is not your main residence, then you may also have to pay CGT. So it could be costly to do this.

Terryw
Discover Home Loans
North Sydney
[email protected]

Suze

Why would it be better to buy in a company name? Companies do not get the 50% discount on CGT, so when you were to later transfer them to a trust, you would be charged 30% tax on the CG.

If something goes wrong, the bank may still be able to take your PPOR as you will be giving a personal guarrantee as Director, therefore your personal assets will be vulneable.

A far better option would be to buy the property in the correct structure in the first place. Trusts are usually the way to go. Talk to a good accountant about this.

Terryw
Discover Home Loans
North Sydney
[email protected]

A bird in the hand is worth two in the bush.

Terryw
Discover Home Loans
North Sydney
[email protected]

Just remember this is only an interpretive decision, not law. The ATO will probably pick a test case and go to court.

Imagine if you had wrapped in properties in one year, each with a $20,000 markup. You would not receive this capital gain untill years down the track, but may be required to pay $200,000 in CGT upfront!

What happens if the contract is terminated after you pay this CGT, and then you decide to just rent the property out normally.

You should probably start preparing now. Maybe lease options can overcome this. Maybe structuring the deal differently. Eg no markup, just a higher interest rate with a ‘fee’ at settlement.

Terryw
Discover Home Loans
North Sydney
[email protected]

Hi Daa

Don’t forget the cumulative effect-saving interest on interest. Also to save $500 after tax, you may have to earn about $1000 before. Every little bit helps.

Terryw
Discover Home Loans
North Sydney
[email protected]