How could it be otherwise?

If you are buying a $600k property you have to pay $600k!

bens0n wrote:

So assuming I claim my first property as PPOR and then sell within 6 years I will avoid paying CGT. Could I then claim my new property as PPOR after the first one is sold and avoid paying CGT on that as well?

Not for any overlapping time.
but if you sell the first within 6 months of buying the second you may be able to claim the exemption on both.

Walking to run wrote:

Terry,
Say that again, property in my name but we can both be borrowers? Will that help for future loans or make little difference as I’m still 100% accountable for the loan?

Yes a non owner spouse could also be on the loan. Deductions will fall to the owner.

It s not a good idea to do this unless you cannot borrow on your own to get the property as it will double the risk and hurt serviceability

There is also Propertunity in Sydney

$100,000 property
$80,000 loan 1
$24,000 loan 2

Wait 2 years and then refinance loan 2 into loan 1. Free up $24,000 cash to use for the PPOR purchase.

—
IN 2 years the property may be worth $140,000. (maybe be a bit longer)
80% x $140,000 = $112,000 = enough equity

So you just increase loan 1 to $104,000 and use the $24,000 released to pay out the sister.

aque wrote:

I thought borrowing 104% is not possible. Or it is possible if I use 20% use a security for the loan without triggering LMI?

Of course it is. Borrow 80% from ANZ and 24% from your sister.

Benny’s right – the word “NOT” is missing.

Bobby wrote:

Hi guys, My partner and I are looking at buying a 2 bedroom unit in Brighton, VIC as a PPOR. We plan on living in it for approximately 8 years. We would then like to buy a family home somewhere else while renting out the unit. We wish to hold the unit for life and use it for income. Is the best way to set up the loan by borrowing %80 of the property value as an interest only loan with an offset account. We don’t want to pay off anymore on the loan for future tax deductions we could use when renting the property out in the future. Any extra income we put into the offset account we will redraw to make the future purchase of our next home.

Does this sound like the correct setup? Any advice would be greatly appreciated. Thanks

Good set up, but could be improved.

Borrow 100% like Richard suggests, but I would suggest you consider buying in 1 name only. When you move out sell to the other spouse who will borrow to buy. This could potentially double the deductible portion of the loan and free up cash to pay for the new PPOR. Indirectly you will be borrowing to buy the new PPOR and claiming the interest. There should be no stamp duty or CGT on this either. Just a bit for legals and tax advice. but seek legal advice before doing this as there are many issues – e.g. you spouse as sole owner could die and leave it to the rspca for example

Asset protection is usually associated with protection from potential future creditors. An interest in a discretionary trust is not something that amounts to property so if a beneficiary went bankrupt the creditors won’t generally get access to the property of the trust. Business people are at a significant risk of potential bankruptcy, but non business people can and do go bankrupt too. I have seen a few go down – due to credit cards, court cases about defective cars that they lost, contractual disputes, loan defaults etc.

Also consider asset protection in death. Trust assets do not form part of the estate on death, so don’t pass via a will. If a will is invalid or challenged then generally trust assets are safe (except in NSW potentially).

Depends on many things – as long as it is not income producing, you are not renovating as a business and neither are claiming another residence and you are both living in it as the main residence then it will probably be exempt from CGT.