My personal preference would be to keep the house and do what Steven suggested, ie borrow against it and use this as 20% deposits.

I have actually done hwat you suggested about selling a house to invest, and I regret it now. Don’t forget all the costs and hassles involved. real estate agents commissions, people comming to look, dealing with lying agents etc. And then when you eventaully purchase a new property, you have to pay stamp duty etc. Lots of costs.

Terryw
Discover Home Loans
North Sydney
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Hi Luke

You can arrange direct debts on LOCs wihtout any problems. So you can pay the interest ona another loan from this account.

Lenders generally want to see 6 months genuine savings for high LVR loans, but these days there are a few 90% LVR loans that do not require genuine savings. And from memory, there may even be one or two that allow 95% loans wihtout genuine savings.

Terryw
Discover Home Loans
North Sydney
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of course. Everyone has to pay tax. How much will depend on how big the profit is. If the pensioner has no income (but i think the penson is taxable income??), then they can make $6000 profit and pay no tax. This may equate $12,000 profit before the 50% CGT discount is taken off.

Terryw
Discover Home Loans
North Sydney
[email protected]

Good stuff MH. When I need a loan, I go to MH![]

Terryw
Discover Home Loans
North Sydney
[email protected]

GMH

I think you will find that ‘main residence’ only refers to owned properties. Otherwise the rule would be redundant, you have to live somewhere, and if everywhere you lived was your main residence there would be no need for the rule.

There is an example in the legislation (ITAA (1997) Section 118-145) where someone goes overseas for 5 years and is still able to claim the original home as his main resdence. [Although, you could argue that he did not have an Australian main residence at the time.]

I have also asked a ATO tax investigator and he beleives you can still claim the other property as your main residence, even if you are renting elsewhere.

BTW, the relevant section of the legislation can be found at:
http://www.austlii.edu.au/au/legis/cth/consol_act/itaa1997240/s118.145.html

If this could apply in your situation, please talk to a good accountant as it couls save you a fortune.

Terryw
Discover Home Loans
North Sydney
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Sorry Doggie, I am a mortgage broker not an accountant. If you want to lear about trusts, just do a search on the forum and buy the buy called “Trust Magic” by Dale Gatherum Goss. http://www.gatherumgoss.com.au

Terryw
Discover Home Loans
North Sydney
[email protected]

You could do it either way. COC is just a measurement used to compare different investment strategies. Infinity is nto real meaningful, so I would calculate it as if using 20% cash deposits. You could be using these deposits elsewhere, so that is what you want to compare.

Terryw
Discover Home Loans
North Sydney
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If you are moving out and renting you should be able to take advantage of the 6 year rule. You can still class your oirignal home as your PPOR – even if you earn income, and pay no CGT if you sell. Do a search for more info.

Terryw
Discover Home Loans
North Sydney
[email protected]

Some sort of Trust structure should do you. Try to get a hold of “Trust Magic” a book by Dale Gatherum Goss, a melbourne based accountant.

Terryw
Discover Home Loans
North Sydney
[email protected]

Terry

it is my understanding that you may need a valuation when you move out of your PPOR as it is CGT exempt during this time. The CGT libility begins accurring once you move out (altho there are some ways around this).

What does the Tax Handbook say on this matter?

Terryw
Discover Home Loans
North Sydney
[email protected]