We are just about to bid at auction for another IP.
I wasn’t aware that Mortgage Stamp Duty in NSW is being abolished from 1st of July 2016.
http://www.osr.nsw.gov.au/taxes/mortgageDoes mortgage stamp duty become payable based on execution date (eg closing) or approval date….eg should we hold off getting approval until after July the 1st (we wont be closing until after 1st of July so if calculable from this date then point is moot).
Thanks In Advance,
DeanHi Dean
Its looks like its July 2016 mate still another year away and its Mortgage duty … Not stamp duty … Cheers
JohnnyK
If the deal sounds to good to be true ... dont worry it will be ...lol ...
ha ha…..ooops.
must go to bed (im in NY on a different time zone), thanks, and yes….. read that wrong. goes away in 1 year and 13 days …..not 13 days from now.
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This reply was modified 9 years, 5 months ago by
DeanCollins.
Mortgage duty only applies to individuals borrowing for non property purchases (e.g. a LOC) and company loans. It would be on the date of the loan acceptance.
An individual buying property won’t be charged duty on the loan they take out to buy this property.
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
@terry, so the St George portfolio loan doesn’t attract stamp duty on mortgages for IP?
don’t worry I found the answer
– http://www.osr.nsw.gov.au/taxes/mortgage/about
Exemptions and concessions
Are there any mortgages exempt from mortgage duty?
Mortgages exempt from mortgage duty include:
◾mortgages for the purpose of owner occupied housing, including: ◾financing the purchase of a residence
◾financing the construction of a residence
◾financing alterations or additions to a residence
◾financing the purchase of residential land
◾repaying another advance, if the advance was for owner occupied housing.◾mortgage for the purpose of investment housing, including: ◾financing the purchase of investment housing
◾financing the construction of investment housing
◾financing alterations or additions to investment housing
◾repaying another advance, if the advance was for investment housing.Note: Exemption applies to owner occupied housing and investment housing mortgages where the borrower(s) is(are) natural person(s).
I wonder why St George quoted mortgage stamp duty this time around when they knew it was for an IP (inexperienced agent?)
@terry, so the St George portfolio loan doesn’t attract stamp duty on mortgages for IP?
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Its not the product it is the use. If the loan is being used to purchase property now then there is no duty. If the loan is being used to set up for some future property then there will be duty payable – but banks assess this and collect the duty and sometimes they miss it. If you are charged duty for a LOC you can later fill in a form and ask for a refund, one you use the LOC on property.
BTW you should not be buying a property using the St G portfolio loan. This and other LOCS should only be used to access equity. If you use it for transactions you could end up with a large loan with none of the interest deductible.
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
Hi Terry
The St George portfolio loan is only being used for property purchases and each property is being handled by a sub account.
It does have the issue of all the loans being cross collateralized but as I’ve discussed before, I don’t have an issue with this in our personal situation.
Thanks for your advice though, always appreciated.
Hi Terry
The St George portfolio loan is only being used for property purchases and each property is being handled by a sub account.
It does have the issue of all the loans being cross collateralized but as I’ve discussed before, I don’t have an issue with this in our personal situation.
Thanks for your advice though, always appreciated.
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Terrible situation. Not sure why you would want to set it up like this (destiny?). Not only is there the cross coll issue but the tax issue – hope you are not going to make any deposits?
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
Hi Terry,
I’m just curious to know, how is the St George portfolio loan an unfavourable choice for investing in property from a taxation point of view? I’m guessing that as long as the equity is used to invest, the interest accrued can always be tax-deductible, even if the loan is secured against one’s own PPOR?
Phil
Hi Phil,
it isn’t “unfavourable for taxes” and you are right its what the loan is use “for” not what the loan is “against” that determines its tax treatment.
it is a problem however that they don’t offer an “offset loan” because if you pay down then “withdraw” for non taxable purposes…..yu end up with messy accounting, fortunately for us we only “pay into” our portfolio loan a the only “withdrawals” we make are deposits to purchase the next property so for us its not an issue.
There is also the issue of x-collaterisation which I don’t have an issue with….but lots of people do.
Hi Terry,
I’m just curious to know, how is the St George portfolio loan an unfavourable choice for investing in property from a taxation point of view? I’m guessing that as long as the equity is used to invest, the interest accrued can always be tax-deductible, even if the loan is secured against one’s own PPOR?
Phil
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The Portfolio loan is a great product, but it can be a disaster if used a certain way. Some advocate crossing several properties to get one big portilo and this can ruin retirement if a property is sold as the lender may use the funds from the sale to reduce overall debt with the bank. but the main issue is if you are using the LOC as a transaction account. Money going in and out and that could mean a large debt but none of it deductible. There is no possibility of an offset on the Portfolio (i think).
Best to avoid LOCS for the main loan and only use them to access equity.
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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This reply was modified 9 years, 5 months ago by
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