Can anybody tell me why a lender would implicate that there are tax implications in changing your cross collatorized securities to become stand alone securities?
Just assume nothing else is changing, just a general restructure of funds, at the end of the day with the same amounts owing, all properties are investment anyway…
Liz
Mortgage Lender
1300 780 826Hi Liz,
I’m not sure myself. I think it has something to do with the ways stamp duties are imposed on the properties. any other morgage experts could throw some light on this.
thanks,
hermanHello,
IMHO the lender is lying to you. They prefer cross-collaterisation so will make up any story to keep you from changing it. If you could tell us the name of this lender I would greatly appreciate it.
Tax in simple terms is based on your income (in the broadest definition ie including capital gains etc). Tax is not based on what security you have for your loans. An obvious example is that you can use your own home as security for an investment loan. This does not destroy your capital gains exemption, land tax exemption etc.
As Herman mentioned there could be mortgage stamp duty fees – I suppose they can be claimed on your tax return. Thats the only affect I can see.
Well it was a lending advisor at one of the major banks branches but I’m never too keen to slander anybody in public forum!
I think it was more a personal issue rather then an institutional one. As you’ve all implicated yourselves, my first assumption also, was that he was lazy, but I don’t like jumping to conclusions wihtout second or third opinions!
Thanks for the feedback all of you.
Liz
Mortgage Lender
1300 780 826Hi Liz
I cannot see any reason why the tax implications would change due to cross collateralisation. I agree with Tom.
Sometimes it can very dangerous listening to people working in Banks.
Terryw
Discover Home Loans
Parramatta
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Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Tell me about it… I used to work in one. The morale is all time low, the turnover is high, tellers NEVER balance (and people say they prefer humans to ATM’s!!!) and nobody knows anything!!!
Don’t get me started on why I became a broker… in a nutshell, can’t stand the banks and their antiquated ways…
Liz
Mortgage Lender
1300 780 826SLANDER?
Why is is slander to state a fact?
If you say “person x at bank y advised me their may be tax implications regarding cross-collaterisation”, that is a simple fact.
We live in a sad world where people are afraid to speak the truth. You let large companies rule over you which is rather hopeless.
Well I have reverted to calling the employee lazy
and so have a few others, and that’s all opinion and could easily be considered slander.Besides, I don’t want to inflict negative connotations on an institution, which has thousands of representatives, not just the one that seems to have created the confusion. I’m certain that a more competent employee would not have made such a remark.
There is always an avenue to stand up to a large company, I am never afraid to take on a challenge.
Liz
Mortgage Lender
1300 780 826Lizzy
Let us know how you go with it , I wonder were this person was coming from.
Buying Propertys in the USA email me to learn more.
[email protected]As it turns out, he didn’t seem to realise that ALL properties were investment, ALL loans were investment. Why this wasn’t blatantly obvious is beyond me still.
Never mind, the good news is, the customer comes to me, even though they have negotiated the rates with the bank already. Now that was a nice compliment!
Liz
Mortgage Lender
1300 780 826Hi Liz,
don’t you think it’d be better if you contact your BDM of the lender, and re-check the truth. Just to prevent further uncertainty or pitfall.
I vaguely remember, more than one year ago, a major lender’s BDM gave a presentation to our group members. He gave us a warning tip about a refinancing and re-structuring case from another lender (sorry, I could not recall the exact scenario). But the lesson he wanted to let us know was be very cautious when handling a refinance case involving multi properties, and cross collaterisation. Because the case he presented ended up causing the broker couple of thousands to compensate for the recurring of mortgage stampduties.
I’m not here for scaremongering. but won’t it be better if we could do a preventive checking. I hope I was wrong here.cheers,
L&S,
No, nobody I’ve asked has come up with anything better.
Recurring or mortgage stamp duties??? There is only upstamping to think of. I always warn clients in refinance situations of the full mortgage duty payable, as they are quite often out of pocket until the rebate from OSR comes. I can’t see how Mortgage Duty would leave a mortgage broker out of pocket.
The thing about this case is that it is straight forward, you have 100% loans investment, 100% securities investment.
Either way I’ve forced the point that the client needs to seek independent financial advice and that I am by no means a qualified accountant. As far as I’m concerned by liability ends there.
Everything else is pretty straight forward, calculating mortgage duty is pretty easy. You only pay mortgage duty on the portion of the loan increase.
Perhaps if you remember exactly what the issue is you could share it with us all. I cannot think what other implications there are.
Liz
Mortgage Lender
1300 780 826I used to have girlfriend for a few years that worked at the NAB as a personal banker/lender.
I was so appauled by the STRESS she was put under to perform, and the attitude of her boss, that i’d never step foot in a National bank again.
You couldn’t pay me enough to do busines with that institution…. hows that for FACT!
Cabo Wabo
Hi Cabo Wabo (love the name)…
But don’t you find it difficult to generalize this one boss and his actions, to a whole institution? And if so, perhaps you didn’t think that ALL banks put terrible amounts of pressure on personal bankers and lenders and tellers to perform?
I mean I used to work for a big bank, and I understand their hard nosed “sales” approach. For the record I completely disagree, I think sales should NEVER be pushy… but the thing is, most banks operate this way. It’s sad but true.
Havn’t you ever thought sales is the most stressful job?
My point is that despite hating the NAB, I think you should think more broadly. I sell their products through Homeside, and I am absolutely chuffed with what they have done for me.
For instance, Homeside allowed me to refinance a client from a lender charging 10%, because the client had defaults, we made a good case and they approved the deal. It was totally outside the square, and they looked at it. They are one of the only BIG banks that I’d consider to have a heart… They are one of the only lenders I’d respect.
Besides, if something is stressing you out, the best way to make a point of it is to leave, and tell nobody else to work there right? Take control of the situation so you are no longer a victim of it, then nobody has to hold lifelong meaningless (well to everybody else but you) grudges…
Liz
Mortgage Lender
1300 780 826
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