I was wondering if someone could tell me briefly the tax benefits of buying property with other parties in a trust and how you apply for finance – ie does the trust apply or do the individuals? There are 3 parties involved and we are looking to purchase investment property with the intention of building a portfolio but selling some properties quite quickly
Fearless,
If you set up ‘Hybrid Discretionary Trust’ then you can do that. You still be able to do it with Unit Trust. But I like ‘Hybrid Discretionary Trust’ before for future where you can also buy -ve gearing property.
How ‘HBDT’ where is that the two party borrow money from the bank and lend it to the trust. The trust use the money to buy property and distribute the unit to the two party of whatever amount that the party lend.
is it going to be a +ve or -ve cash flow property?
Warm Regards
ChanDollars
[Keep going, you’re on your way to Frolic Freedom!]Fearless and Chan$, for unrelated parties buying together the only trust I would use would be a unit trust. This keeps all entitlements in line with unit ownership. Any form of discretionary trust with unrelated parties is just asking for trouble.
Fearless, contact a mortgage broker regarding how to set it up. I’d say there are a couple of ways. One is to borrow the money individually, and buy units in the trust. This would probably leave the house unencumbered.
Another way is for the trustees (either individudals or company) to borrow/guarantee the loan with the house as security. This method is the one I am doing at the moment.
Cheers
MelOriginally posted by melbear:Fearless and Chan$, for unrelated parties buying together the only trust I would use would be a unit trust. This keeps all entitlements in line with unit ownership. Any form of discretionary trust with unrelated parties is just asking for trouble.
Fearless, contact a mortgage broker regarding how to set it up. I’d say there are a couple of ways. One is to borrow the money individually, and buy units in the trust. This would probably leave the house unencumbered.
Another way is for the trustees (either individudals or company) to borrow/guarantee the loan with the house as security. This method is the one I am doing at the moment.
Cheers
MelGood point Melbear. What I meant in the above posted was for those who some how related or both trustees or director of corporate trustee. Thanks for clarification.
Warm Regards
ChanDollars
[Keep going, you’re on your way to Frolic Freedom!]Thanks Chan$,
You make everything Clear!Julain
THERE IS ALWAYS A BETTER WAY!
Hi
It is very easy to get the loan when using a trust. In fact it is vritually the same as when applying for a loan in individual name. The only difference is the bank will want personal guarrantees from the trustee and/or unit holders and will want to see a copy of the trust deed.
Terryw
Discover Home Loans
North Sydney
[email protected]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
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