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If you can substantiate that you are in the business of property investing, then these costs should be claimable. You would have to already own a few properties tho.
Terryw
Discover Home Loans
North Sydney
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Richard, these are legal and done all the time in Australia. Unfortunately you will be up for stamp duty as you are buying and onselling. You would also be up for CGT.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Hi. yes there are various ‘low docs’ and ‘no docs’ and what I call ‘we don’t give a stuff docs’ (private lenders etc, rates 8 or 9%).
Normally you need 2 years self employment history to get a good low doc.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
I had a similar problem with ANZ. I went to sell a property only to find it was not in my name! ANZ never registered teh mortgage at settlement. I used a cheap conveyancer too.
Talk to teh banks customer complaints section. And it is probably best to speak to your solicitor too – and then ask the bank to pay for these legals fees (they probably will).
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
You can still get loans without a job-easily. But you will have to pay a premium on the interest rate and the LVR will be lower. It is far better to keep working full time as long as you can and then after you get to a certain level, bail out.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Kim
I am not sure on the asnwer to this, but am under the impression that if you were to rent out part of the property (eg. 50%) then that part would lose the CGT exemption.
Melanie
I am not exactly sure but if that was the case, maybe Kim could stop renting out 50% of the property at some stage and then the 6 year rule would start again. Kim, please let us know what you accountant suggests.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
You may not be able to refinance your loan if the value has dropped. If you think there may be a crash comming up then prepare now by building up some reserve funds.
Also it is possible that the lender could ask you to pay down the loan to keep the lvr at the same level incase of a drop. I have seen them do this with rural properties. It is like a margin call on shares.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
I made some enquiries a while ago and could only come up with a private lender that was willing to lend on someting like this. The rates would be in the 8% + range, and LVR was about 70%. This is not ideal, and severely limits the resale value of these units. Though, the rental yield can be higher than normal.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
I think COC (hey don’t be rude!) return would be calculated on the amount of money coming out of your pocket.
eg if you put $5000 and get back $2500 in year one, then it would be a 50% COC return.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Unit trusts are good because the ownership portions can be fixed. You could also have your discretionary trust owing the units in the unit trust for maximum flexibility.
If there is a split up, it will still be messy and one will have to buy out the other, so it won’t be much different than buying in your own names, but the asset protection will be greater in the trust.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Yes it would be legal. But you would have to pay tax on it. but she is probably paying tax anyway. It would look good for your next loan application too>
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
You should be able to. In NSW I beleive that if they pay anything other than 10% and they don’t go thru, there is a clause that says you are entitled to the full 10%.
It may not even cost that much in legal fees to do, but may be worth it.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Troy
if you trust is the shareholder, then the $200,000 could go to the trust as a dividend payment. The trust pays no tax if the money is distributed, so if $50,000 went to yourself, then you would pay tax on this money. it would be added to your other income, so you may end up paying more tax than if you left it in the company.
The $50,000 used for property investment, this would have to be distributed to someone or some entity and they would have to pay tax on this. The money can be loaned to another company or trust, but tax would still be paid on the initial distribution.this is my understanding anyway.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Yes you can use an existing report (but don’t have to), however it may be worth while to get a new one done by a professional company. Try http://www.depreciator.com.au they guarrantee you will be able to claim more in your first year than the cost of the report.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
I recall seeing (but not reading) a tax ruling on this subject too on the ATO site.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Hi Hux
Usually it is the other way around. ie people trying to hide loans not assets. I would say declare it, as it can only strengthen your case. The bank cannot take amortgage over this property without your consent (and signing loads of docs), so you have nothing to fear.
You may also be getting rent from this porperty which you would not be able to show if you don’t declare ownership.
The lenders is unlikley to find out you have this property if you don’t list it, but in the unlikely event that they do a title search under your name, it may come up. (also depends on how unusual your name is as DOBs are not recorded).
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Yes I would say it is safer to gift money to the trust. If you (or a company) loan the money and are ever sued, the person suing you could call in that loan. If a gift, then they probably couldn’t (depending on when it was gifted-if within 6 months of going bankrupt then you could be in trouble).
If the trust owns the shares in a trading company, then all the profits would go to the trust which could then distribute it at the trsutees discretion. If owned by individuals you don’t have this flexibility.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Gee. I think it may be wise. Try to get the lender to pay for it as it is their fault. If they won’t speek to their complaints section.
This happened to me the other day as well. A clients solicitor dropped the document folder after settlement. Luckily she was shopping at the time and the shop assistant found it.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
It is really no different to getting a loan in your own name. Lenders will ask for a guarrantee from the trustee (or Directors of the trustee company).
The only additional information that the banks usually ask for is a copy of the trust deed.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
BTW, there is not minimum period specified in which you must live at the house to class it as your main residence.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
