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  • Profile photo of g4defenderg4defender
    Participant
    @g4defender
    Join Date: 2023
    Post Count: 0

    Hi All.

    Naked newbie here, do not own 1 property not even PPOR. We sold that about 4 years ago, and moved to a location with job that provided accommodation. Our PPOR even after 10yrs where it was located did not really provide that great return and sat around the same price for many years and we only made about $300, so after CGT and fees was not left with that much. The money we had we put 110ish into ETF’s and the rest in a regular bank account ( I know I hear the sighs lol) until we were ready to purchase an IP this time.

    We are ready now, and was thinking of using a buyers agent, as we live in the middle of nowhere so there would be no chance to explore properties ourselves. (10hr drive even to Darwin) We are not bother where we buy our IP and ideally would like 2. We just need to understand some fundamentals we have been reading.

    I am assuming we are looking at getting a IO mortgage with an offset account and moving any money saved into the offset. My 1st question is it seems you can only have an IO loan generally for 5yrs max. What happens then do you sell or can you refinance to another IO with another provider, and can you use the interest payments to offset the tax bill each year?

    2nd question is we only have about 15yrs till retirement and do not have a PPOR and was thinking that with the 2 IP we could sell and buy for ourselves outright hopefully, or suggestion has been to pay into our Supers and maximise the 27,500 for the remaining 15yrs as the tax advange is good. So confused but need to do something.

     

     

    Profile photo of BennyBenny
    Moderator
    @benny
    Join Date: 2002
    Post Count: 1,416

    Hi G4,

    Hmm – who’s your accountant?

    Our PPOR even after 10yrs where it was located did not really provide that great return and sat around the same price for many years and we only made about $300, so after CGT and fees was not left with that much.

    I believe a PPOR is a CGT-free entity, thus there should have been none to pay at all on its sale.  Of course, there might have been extenuating circumstances not mentioned (e.g. you bought another PPOR, or you rented your PPOR for more than 6 years…..).  If $300 was all the profit, then any CGT would be laughably small anyway….  but hey, there shouldn’t be any…..

    Puzzled…..

    Benny

    Profile photo of g4defenderg4defender
    Participant
    @g4defender
    Join Date: 2023
    Post Count: 0

    Apologise, meant to say that we bought it, then moved out and rented it out for about 5 yrs as we had accomodation with the job.

    Profile photo of BennyBenny
    Moderator
    @benny
    Join Date: 2002
    Post Count: 1,416

    Hi G4d,

    Check your Private Messages…  ;)

    Benny

    Profile photo of BennyBenny
    Moderator
    @benny
    Join Date: 2002
    Post Count: 1,416

    Hi g4d,

      suggestion has been to pay into our Supers and maximise the 27,500 for the remaining 15yrs as the tax advantage is good.

    On reading that, it sounds like a saving !!   Steve says often that saving to invest makes sense, but saving on its own won’t lead to wealth.  Many are trapped by the sound of “save Tax”, and end up in deals they perhaps should’ve stayed out of.

    Investing takes many forms.  Some I have heard bought a PPOR they could afford, spent time and money doing it up, then upgraded to the next highest value/level.   If your family/spouse can handle a few moves, there is a significant saving because of the CGT exemption on your own home.  Over some years and several moves, it is possible to end up with a home worth a lot of money.  But then, you’d need to move out of it to utilise the new-found equity, so it isn’t all beer and skittles.

    Find a way that you (and yours) can work with and agree to, to create wealth.   Some ways are fast, and some less so.  The fast ways often have more risk, but risk can often be mitigated by knowledge or experience.  Keep on looking and keep asking questions until you find “your way”.

    Regards,

    Benny

     

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