Forums / Getting Technical / Legal & Accounting / Asset protection for career change

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  • Profile photo of TivsTivs
    Participant
    @tivs
    Join Date: 2018
    Post Count: 2

    Hi all! Hoping to get some perspective from the wise & experienced please! I’m a full-time mum & own the family home (PPOR) in my name mortgage-free. That’s about 90% of my wealth, & I have no income. Having always been an employee I’m now interested in not trading my time for money. One option is to rent out parts of the house, to a lodger (granny flat) & to another party as a business premises, generating income (that could then form a deposit on an IP for example.) Gross rents would be about 1% of PPOR value. But I don’t want to lose the home in the event something goes wrong (eg tenant’s client gets injured and sued me as landlord). The projected rental income is not worth paying stamp duty to put the house in a trust. Are there any solutions here or can I only ever safely be an employee?

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,110

    Yes there are asset protection strategies you could use.

    Terryw | Structuring Lawyers / Loan Structuring Pty Ltd
    http://propertytaxbook.com.au/
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

    Profile photo of TivsTivs
    Participant
    @tivs
    Join Date: 2018
    Post Count: 2

    Thanks Terry! Do you know what setup/maintenance of such a structure might cost please? (Wondering if the earnings will cover it!) Spouse, 1 dependent minor (if that’s relevant!). And how long does it take to create?

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,110

    it will depend on what you do. It could be $0 to $10,000 to set up with $0 to $257 to more in annual fees.
    e.g. a gift and borrow back from parents would cost about $2,200 to set up and nothin to run.

    Terryw | Structuring Lawyers / Loan Structuring Pty Ltd
    http://propertytaxbook.com.au/
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

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