Hi there… got a few questions to ask and i'm wanting some advice if possible…. I'm borrowing cash from abroad to invest in oz (I live in Sydney)… the equivalent to AU$300,000 (hopefully a bit more) on a 5% interest which will save me loads of cash…my partner and i have a joint income of approx AU$8000 per month.
I'm really looking forward to getting into the property ladder… but i'm not quite sure as to wheather to buy one property to live + buy another as an investment or better off living renting and get x1 investment property…. or even x2 investment property and renting at the same time….
We also have $70,000 deposit or as a backup in case something happens.
What are the tax implications on a lump sum of that amount (300k) being transfered into an aussie bank?
Thanks a million guys… hope u can forward some advice.
Hello BuDoKeN
I am not an accountant and suggest that you ask your accountant this question before you do anything else, specially about the deductibility of the interest you pay on this loan against your Australian income.
As a non expert I think there is no problem with transferring a large amount to Australia as you will be able, if necessary, to show that the source of the funds is a loan and not "black money". I also think that the interest will be tax deductible if it is used for an investment but as I said, go ask your accountant.
The first thought that came to my mind was that you may be saving interest but that you are exposing yourself to currency exchange rate differences which, over a period of years, may become much more substantial than the difference in interest rates. Of cause you can also win on the currency exchange differences if the Oz dollar strengthens against whichever currency you're borrowing. Have you added this risk to your calculations?
Cheers
Elka
Hi,
Interesting thoughts. I would only say that the Govt require you to declare funds over $10,000 coming into the country. I expect that you would need to provide sufficient documentation to show it is a loan and not income.
Best to speak to an accountant or even call the ATO. Please report back to the forum what you find out.
Good Luck
JasonI don't think there are any general tax implications, but….
The ATO can get suspcious of people borrowing money from overseas in some circumstances. This is a strategy which some use to avoid tax when they borrow their own money and pay themselves interest which they claim as a deduction in Australia, yet pay not tax on at the other end.
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
Thanks a million guys!! the currency i'm talking about is Euros though the aussie dollar is getting stronger against it. Will speak to an accountant and i'll get back to you.
A colleague of mine at work had a chat with her accountant and said it shouldn't be a problem. However he suggested to find a solicitor for the small print.
"I'm really looking forward to getting into the property ladder… but i'm not quite sure as to wheather to buy one property to live + buy another as an investment or better off living renting and get x1 investment property…. or even x2 investment property and renting at the same time….
We also have $70,000 deposit or as a backup in case something happens."
Is it really worth buying 2 properties to rent + living renting?? I had so many people saying that you are better off living in one and renting the other… I'm confused!!
Anyway guys…. will get back to you re tax implications…
Ta
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