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Is she your legal spouse? If you are separted it should pose no problem as long as it is all done at market rates. But even if you are not legally separated it may pose no problem. Give the ATO a ring and ask. (also ask for the name of the staff member you talk to).
Terryw
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How much deposit have you got? and what LVR?
Terryw
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Crashy
Land tax is 1.7% in NSW, tax free threashold is $261,000
Terryw
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And you may lose the tax exempion status of your home. Why not do it and not declare it. It si not worth the hassle just to save a few dollars per week in tax.
Terryw
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easy
Your uncle simply gets a loan increase (a split or a LOC) and lends you the money. That is the safest way for your uncle to do it. That way his home is not on the line. And it won’t affect your borrowing capacity.
Terryw
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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If your loan is very small and you start renting out your old home it will probably be positively geared and you will be paying tax on this ‘profit’.
If you then buy a new home and borrow most of the money, then you will be paying lots of interest on your new home. To make things worse, this is not deductible.
You could increase the loan on the original home and withdraw the money to pay down the new home’s loan, but the interest on this would not deductible as the ATO regards this exenditure as of private nature, ie not for investment purposes.
One way around this is to ‘sell’ your old home to a trust (that you control). Since it is a sale you will be able get a loan upto 90% of its current value. this will be deductible as the purpose was to purchase an investment property. Stamp duty will be payable, but CGT would not as it is the sale of your PPOR. The proceeds from the sale could then be used to purchase your new PPOR.
This way you can increase your tax deductions while freeing up your equity to reduce your non deductible debt.
Does that make sense? make sure you check this with a qualified accountant first!
Terryw
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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A Letter from an agent should do it. Even better would be moving back in with your parents or a relative rent free! It is OK as long as that is what you are intending to do.
Terryw
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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If you are going to sell, have you considered moving into one of your future IPs for a short time and claiming that as your PPOR. you will be exempt from CGT for up to 6 years.
Terryw
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If you have a lot of loans with one bank, then you have something to bargin with. You can ask for discounts etc. If they stuff you around, then ask for a payout figure and see how quickly things change.
But I generally prefer to have loans spread out. Different banks have different serviceability calculations anyway, so you can often qualfiy for more with one bank at one time, but then when your circumstances change you may be able to get more from antoher bank etc. And the banks products etc are always changing, so the best bank today may not be the best tomorrow.
Terryw
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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Michael
using a company is not a good idea if buying property. No CGT discount. Using a trust is much better in my opinion.
Ig you use your car for income related purposes (such as viewing properties etc), you can claim part of the expenses as a deduction. Have a look in the tax pack for more details. A company get buy or lease the car, but if you use it for personal trips you will be required to pay FBT (I think).
Terryw
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Lucky
1) I think the going rate for borrowing money from people is 10 to 15% pa.
2) If you have already refianced, then you must meet serviceability so you should be able to refiannce again. But watchout for exit fees, and entry fees again. It may be wise to wait 6 months to get some more growth.
Terryw
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Hi JJ
I live in Sydney too, and would love to meet up sometime. I also have the cashflow game, so maybe we could organise a small group to play sometime.
Terryw
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Hi Johnny
You could get this sort of return by wrapping. Ona $100,000 property, you could make about $5000 per year profit, so you would need at least 3 properties wrapped to get $15,000. You would also get captial gains when they cashed you out.
Terryw
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Hi Johnny
I am sure you could be the return you are currently getting on your money.
With $380,000 in cash you could buy a lot of property. For example you could put down 20% deposits and borrow the rest. Maybe go for cashflow or a rundown place that you could rejuvenate? Get one and see how you go. (eg you could theoretically buy about 15 x $100,000 proprties)
Terryw
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
I agree with Regina, it is a great problem to have.
I would be incloned to keep this property as it and borrow against it for income producing property which you could then redirect into that personal loan. Do you have a loan on your PPOR?
When you decide to retire (could be very soon!), you could sell this proeprty and then pay off some of the debt on your positive cashlfow properties and have a great passive income comming in.
Terryw
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Jackson
I haven’t got one but have seen a copy. It seems to be pretty comprehensive. I think he just recomends a Discretionary trust with a corporate trustee. There are lots of diagrams explaining this and asset protection etc.
It is interesting how different accountants recommend different structures. I’d be itnerested to hear how they all differed!
Terryw
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KuRCE
Land tax is levied on investment propertis (if you reach the threshold), but they only charge you on the value on the land component, nit the buildings or other improvements.
Terryw
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Hey, watch out when interviewing accountants. A friend of mine did that and then a got a $200 bill in the mail. And she didn’t even know anything about trusts and just talked about negative gearing. My friend thought he would jsut talk to her about becoming his accountant! And she charged him!
Terryw
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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There is not much to lease options. The contracts are just a lease wtih a separate contract for the option. You can have the option strike price decrease just like a PI loan over 30 years if you wish. In that sense, it will be almost the same as a wrap.
Terryw
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
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SMB web site shows it as being under construction.
try http://www.creativerealestateinvesting.com.au
Terryw
[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
