Can anyone shed light on the advantages of purchasing your own home in a family trust.
For example is their any tax advantages?
Should i borrow full amount?
Can i get a depreciation schedule.
What can i claim on tax?Thanks in advance.
Dom [biggrin]hard to say unless your entire position is known.
do you have an accountant you can discuss with?
Byronent
Adelaide SAI do not have an accountant at this stage.
I am asking the question about trust in general and to see if anybody has this sort of structure at present.Thanks Dom[biggrin]
Do a search on Renting Own Home. This has been discussed many times and I am sure you will find the information you are looking.
Hi … not exactly the same topic, but kind of related. I searched for “renting own home”, and couldn’t find what I wanted with a quick scan.
My situation is that I’m in the Defence Force and own a suitable property in my posting locality to live in. If I didn’t own this property, I would be entitled to rent assistance. Since I own the property, I get nothing.
I was thinking of transferring the property into a company I want to set up for all the IPs I intend to buy (squillions and squillions of them[biggrin]). I would then rent the property from the company, and hopefully be able to get rent assistance. It might take a bit of creativity, but there’s gotta be a way to do it.
As I understand it, all repairs and running costs for the property would be a tax deduction for the company. I would not only get a couple of hundred bucks a fortnight for rent assistance, but the govt would help me out with doing some stuff to the place.
Is this flawed thinking? Have I got the wrong end of the stick here? Ideas/comments appreciated.
Cheers
Kez
You shouldn’t use a company unless it is as trustee for a trust. You lose too much CGT otherwise.
The main advantage in using a trust for your PPOR is asset protection. For tax reasons, you would save a bit early on, but in the long run you would be up for tax on the rent when it becomes positively geared (which it will as rents increase) and then CGT when you sell. Both of these could be avoided if bought in your own name.
If you are only planning to live there for a few years, then it may be a good idea.
check out http://www.chrisbatten.com.au
Terryw
Discover Home Loans
Mortgage Broker
North Sydney
Click below to email meTerryw | 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
TerryW,
If you have a large mortgage say $400,000+, Interest only for instance then this property would be highly negatively geared.If you live in it how does the taxation department estimate the rent? Or for that matter how do you?
Any comments would be appreciated.
Dom
[biggrin]
You would have to charge market rent. If the ATO audited you, it would be good if you could prove this via clippings from the for rent sections in newspapers, agents letters estimating rent etc. (just ask them to estimate on the low side).
Terryw
Discover Home Loans
Mortgage Broker
North Sydney
Click below to email meTerryw | 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
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