All Topics / Help Needed! / Advice needed on First PPOR to investment

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  • Profile photo of Chris11Chris11
    Join Date: 2013
    Post Count: 2


    I've been doing my head in trying to make sense of our options and been getting vastly different advice from people I know.

    Basically I work construction, earn about 160k a year and am married with 1 young child. My wife does not work and will be stay at home mum for another 3 years.

    We have a contract for a house and land package in Gladstone QLD due to go to settlement next month. Originally we just planned on living in it for a few years and selling and moving on later, so we never got any investment advice. My wife and I put down to be 50/50 joint owners. Now we have decided that once we build this home, we want to live in it for 6 months (keep the FHO $15k) then move to Darwin to settle, buying a place to live longer term there and renting out our house in Gladstone. I'm borrowing $460k (Build contract worth $496k) to build the Gladstone property  and would probably get $550-700/ week rent for it if market remains similar to now. We're locked into the building contract now so we'll have to build it.

    I can leave it at 50/50 share each but as it hasn't settled I am still able to change it. 

    Now my dilemma! I want to keep this house as a long term investment, am I better off changing it to 95%+/5% share each to offset more of my tax? Or is it fine to leave it at 50/50 as it may become positive geared soon enough?

    I'm very new to this all and any advice would be appreciated!

    Profile photo of TerrywTerryw
    Join Date: 2001
    Post Count: 16,213

    Maybe all in wife's name. Make sure you are able to change % without incurring stamp duty and you have to let your bank know asap.

    On that wage you should be able to put heaps of cash into the offset so positvely geared. Wife could earn up to $20k no tax.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide)

    Profile photo of TheFinanceShopTheFinanceShop
    Join Date: 2012
    Post Count: 1,271

    You will need to advise both your solicitor and your lender ASAP of the change. Change of ownership means the loan application will get re-worked. 



    TheFinanceShop | Elite Property Finance
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    Residential and Commercial Brokerage

    Profile photo of Chris11Chris11
    Join Date: 2013
    Post Count: 2

    Thanks for the input Terry. Yes we are able to change it without paying stamp duty as long as it hasn't settled.

    Profile photo of Anthony KAnthony K
    Join Date: 2010
    Post Count: 56

    Hi Chris11 and All,

    This demonstrates what we should all know.

    It's paramount to PLAN CAREFULLY before you make a decision and/or sign anything.

    I NSW and QLD my understanding is the duty liability arises at the date the contract is signed, not the date of settlement.

    Have a look at QLD Duty Ruling DA016.1.1 which supports this view.

    Another aspect is whether there are two separate contracts, one for the land  and another with the builder?

    If there is a single contract for the whole lot then I guess duty is payable at $496,00 ($15,785).

    However there are two other factors, is it for a home for for an investment property?

    A home gets a $15,000 grant (net duty $785), an investment property gets zero.

    I think you need to think carefully Chris! and speak to QLD OSR before you finalise your position.

    Good Luck Chris11

    Regards to All

    Anthony K

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