You need to be very sure about your strategy. Remember a fixed rate loan locks you into that property for 1, 2, 3, 5 or 10 years – otherwise it can be very expensive to exit! The only other alternative is to switch the loan to a new property but you have to have the right loan in the first place.

There is a difference between claiming your office as a "home office" and a "place of business". When claiming as "home office" there is no CGT implications but you are limited to claiming running expenses ie. depreciation on furniture and the statutory 26c/hour as prescribed by the ATO for lighting, heating, etc. When claiming as "place of…[Read more]

DanielThe accountant you spoked to doesn't have a clue! – I can say this because I have been an accountant for 11 years. A DT is the way to go.From reading the comments above, it would seem the concept of a Family Trust was discussed. Put simply, if there are losses from prior years to carry forward you need to lodge a Family Trust Election which…[Read more]

Andrew Is your loan fixed? Watch any break costs!

I would use an option incorporating agreeable terms.

ptykit wrote:
Hi all,Can I ask a question about capital gain on an investment property?I bought a house in 2005 to live in and moved out in 2007, it has been renting since then. I just realized that I should get a house valuation done before it became an investment property. I plan to sell the house in 2010, can I do a valuation now in order to…[Read more]

icecool wrote:
thks terry & ben.So Ben, in order to rent back to live myself I will have to first set the Trust to purchase the property in a Trust or Company. How will you structure it for maximum benefits if it were you?? appreciate your advice. thks

 I agree with Terry's comments regarding the quarantining of the losses – hopefully you are…[Read more]

It would need to be an agreement signed and dated by both parties, setting out the terms of the arrangement.

I don't mean to be rude, but what business is it of ours what signs are put up on telephone poles! If they are as horrid as you suggest, and they are on telephone poles, your local Council will take care of them. By the way, it's not me!

You can purchase the property in a Trust or Company and rent it to yourselves (at market rent). However, Companies and Trusts can never receive the main residence exemption, so whilst there will be some initial tax benefits, CGT will be payable on the sale.

I think an acknowledgement of debt would be the way to go – because you are talking about a liability you can't make provision for it in your will. Your estate will collect all outstanding monies and pay back your fiancee as per the acknowledgement of debt.

Qlds007 wrote:
If the property is sold (whether it is owned personally or in Trust) and a contribution is made into Superanuation then the Contribution (Subject to not exceeding the maximum contributions per year) can be offset against any Capital Gain.I.e You make a Capital Gain of $50K and $50K is Contributed into a SMSF that year.The…[Read more]

The advantages of converting your PPR to an IP and renting can be substantial – tax savings (don't forget depreciation may be claimable on the construction cost of the house – depending on the age of the house) and you may be entitled to some rent assistance (if you have children) – in some cases this can be approximately $60 per week.

Qlds007 wrote:
BenNAB Commercial loan goes to 70% LVR on residential property and the interest rate is 6.74% variable.The set up costs including the Bear Trust and new Pty Ltd Company come to around $6000 with the right Solicitor.I have done 7 of these deals to date and admitedly they are not straight forward I would certainly recommend it to a…[Read more]

Terryw wrote:

ibis69 wrote:
I am told that you can rent out your PPR and rent a property fro a similar purpose,The benefit you get back could be up to/more than about $26,000 ,I envisaged thsi to be the sort of deal where really both rents equal out and you end up basically with your normally home loan but with a bonus of Approx $26,000 …[Read more]

daniellee wrote:
Hi, JoyceI have no idea how much C&N would charged over the average accountant to do the returns for individuals with IPs, or tax returns for trust. Then again, I have no other reference to compare against. That is another reason why I am planning on meeting another accountant, to get a difference point of view on the feasiblity…[Read more]

daniellee wrote:
Hi, BenWould it not be expensive to have one property per trust only?I spoke with another accountant with experience in dealing with property investors, and he advised me to write everything that I wanted to use a trust for down, so that we can go through the feasibility of a DT after the new year. Already, I am looking forward…[Read more]

give90 wrote:
ben;why do you establish a new disc trust for each property?

Reason 1 – asset protection – if one trust is sued all assets owned by the trust are "up for grabs"Reason 2 – when applying for finance, you don't have to include details of all your other properties which makes things a whole heap easier – this is a trick I learnt from…[Read more]

No additional costs, but if your old PPR was your PPR for the entire time you owned the property up until it became available for rent, you can obtain a valuation of the property when it first becomes available for rent. The value becomes your cost base for CGT purposes for when you sell the property rather than what you paid for it. For e…[Read more]

I have been an accountant for 11 years I have never recommended any of my clients touch hybrid trusts – reasons being, they are complicated and expensive.My recommendation would be the establishment of a discretionary trust. Not only is it my recommendation, I established a discretionary trust for each of the investment properties I have purchased…[Read more]