Forum Replies Created
- JacM wrote:Be careful, I'm certain I read somewhere that you can only claim expenses if the asset earned an income of some sort in the same financial year. Look into it. If you find this to be true, then if you have to, rent the place out for a week for a dollar.
That makes sense I suppose, I hadn't thought of that. Thanks!
I think a one dollar rental contract might raise a few eyebrows though!?
number 8 wrote:The ATO are real people, there do have laws to go by that are often grey…….. You will need to keep the deductions real… They may also classify otherwise typical expenses (not improvements) as part of the cost base due to it be that way when purchased. I would err on the conservative side on this one…..Thats a good point I'll make sure to double check this point with the accountant. Just wanting to get a rough feel at the moment for my own calculations.
Dan_ wrote:benno79 wrote:Dan,
I found myself in a very similar situation recently – I am also with St George.
I asked my broker to explain and they told me this:
"I/O payments are always based on the loan balance, regardless of the offset balance.
Thanks for the response, however every month my loan balance is reducing due to the cash in my offset, yet the payment is static.The repayments are calculated on the 'original loan balance', for the life of the IO loan (usually 5 years or so).
Dan,
I found myself in a very similar situation recently – I am also with St George.
I asked my broker to explain and they told me this:
"I/O payments are always based on the loan balance, regardless of the offset balance. Effectively this means when you have cash sitting in offset, the “interest only” payments that are automatically debited from the offset a/c will not change, instead they will actually repay a small portion of principal (that is, the portion that you have “saved”)"I think Newcomb and some parts of Whittington have better scope for growth and thats where I'd be looking.
I know those areas but don't have a great feel for prices there. I would say Corio and Norlane prices are going to be pretty flat over the years as it is a less desirable area.
Are you looking at an IP or PPOR?I know some areas of Geelong quite well as we bought there recently.
A couple of examples:
Quoted $330k+. Sold for $370k
Quoted mid 3's. Sold for $430k
Quoted around $400k, sold for $435kGenerally if you are prepared to pay 10-15% above the quoted price, you should be in the game. Some agents quote prices more accurately than others of course.
I noticed the weekend we bought at auction (8th May), there was a number of auctions that went below what they would have gone for a few weeks earlier. I figured the interest rate rises were starting to scare people off. The numbers of people bidding also seemed to be dropping.
Let me know if you have any specific places you would like me to comment on.
Kennyjaiz wrote:The "love and affection transfer" portion is really to minimise the Stamp Duty payable, when changing the title deed. If the point of the exercise is to maximise the tax deductibility in the future, then it will depend on the partner/wife's ability to get a loan to refinance the property. Since we are talking about disposing a PPOR with CGT exemption, it may be best to refinance it as much as possible while minimising unnecessary transactional costs. However, it will be unlikely the bank is willing to lend >105% of the property market value. Also, remember to do a valuation (or at least 3 REA quotes) for evidence to reset the cost base when changing over from PPOR to IP. However, do take into the consideration the tax deductibility will be transferred to the partner/wife with this scenario. Whether or not this is the best outcome, will depend on the partner's income, objectives, the alternatives and the total cost of this exercise.it may be best to refinance it as much as possible while minimising unnecessary transactional costs.
But if you simply refinance, you are limited to purchasing investments with that refinanced amount?remember to do a valuation (or at least 3 REA quotes) for evidence to reset the cost base when changing over from PPOR to IP
Could you expand on this point a little more please? Why is it important?
ThanksMr5o1 wrote:terryod wrote:I have a similar question, a friend of mine moved out of his principal place of residence and moved into a new house. He has been negative gearing the first property since moving out. I said this is not right and he maybget hit by the ATO if he gets audited. Can som on let me know what the go is here?Terryod: it all depends on what interest he is claiming against the rent on that property he moved out of.. he cannot claim interest on loans used to construct the new property which he is now living in, even if those loans are secured against his original PPOR. Benno: I thought "love and affection transfers" could only be conducted where no money changed hands? so at first glance, you wouldnt be able to use such a transfer to change your borrowing purposes around. I'm really not sure.. I'll look into it.
Mr501,
In reality no money changes hands, but it does allow you to refinance your loan and redraw the equity to spend on non investment items like a new PPOR and turn your old PPOR into an IP.You could 'sell' the 470k property to your wife under a 'love and affection transfer'.
The funds raised can then be used for whatever you like – ie offsetting your 600k place.
The house that becomes an IP will then have a larger amount owing (since you've borrowed against the equity of this house to 'buy' it off your wife) and be better setup for negative geating.
We're in the process of doing this.
HI sorry to hear your having trouble with the noise. I know exactly how you feel as we live on a main road and it feels like you never have a moment of peace.
Have you considered having secondary double glazed windows? These are a separate window that is installed behind the external window. We fitted it to our bedroom and it works a treat. Would be expensive to do the whole house but definatley worth it for the bedroom.
Cheers
DWolfe,
Send me a PM and we can exhange info on Geelong region.
There is a wide variety of demographics in Geelong so it depends what you want to cater for.
I think Nth Geelong has good potential as it has its own train station on the Melb line and borders some nice suburbs to the South. Geelong West is very popular but maybe the boat has already sailed in terms of growth.
If your in Geelong on a Saturday get the Geelong Advertiser and have a look at some open for inspections.
Home time for me
EnjoyDWolfe wrote:Well FWord, now I know who I am fighting it out with in Croydon, Mooroolbark and Lilydale. (As well as all the FHB who will pay ANY price)I also like Mitcham an Nunawading. I like Carrum and Wantirna South as well.
I like Geelong too but I haven't started looking properly yet.
Sorry I forgot the WA ones East Vic Park and Belmont. They had a huge price rise years ago and are gearing up for another one.
D
I like Geelong as well. I grew up there but now live in Melbourne, but looking to buy in Geelong shortly and ultimately move back there.
Its had conservative but steady growth recently so less chance of rapid price decline should the market collapse.
Its a relatively comfortable ~55min train ride to Melb CBD provided you get a seat – I'm sure this issue will be addressed in time. Transit times will only improve long term.
I think a lot of people who are priced out of a Melbourne family home will start looking there..though I am biased as I am one of those people!
Thanks Terry for the info.
The section 32 shows a series of deeds dating back to ~ 1930's so that aspect should be ok.
When you say costly do you have any ballpark figure? I have contacted my solicitor but don't think she will have the experience to handle something like this.
Thanks
benno79Thanks Mike, excellent and prompt help as always!
Cheers
BenRegarding the equity redraw issue you could consider doing the following: Sell your current house to your partner via a "love and affection transfer" (no stamp duty), refinance in the process and then you can use these new funds to buy another PPOR and negative gear the current house your in once you rent it out.
Speak to an accountant / solicitor though…
Ben
Many thanks for your speedy and free service.
BenHi MM,
I was in a similar position a few years ago. I had received the FHOG, then found out shortly after moving that I was being transferred overseas. I wrote a letter to the relevant government department (cant remember who) explaining my situation – they asked for proof that my circumstances had changed beyond my control. I was able to provide a letter from my employer stating the situation, also the contract from my wife's work to show she intended to continue working, also some bills in our name from the property. The government then replied to say I was able to keep the FHOG in full.
Hope that helps
Bencarlin wrote:Thanks for the tips everyone.Going to IKEA with measurements to see what we can do. Will checkout that Antonius system Ben. Gather it was cheaper to get the doors from Stegbar.
cheers,
CarlinCarlin,
The Ikea doors come in one size fits all…which didn't fit what I needed! Plus fitting sliding doors is a little tricky, especially with an out of square house like mine.
BenHey Carlin,
At our apartment we had a wardrobe with three hinged doors and fixed shelving / clothes rails on the inside. The third door was a hassle with two people sharing it and the fixed shelves are frustrating.
I took off the doors, gutted and repainted the inside and fitted it out with the 'Antonius' wardrobe system from Ikea. We are happy with the result as it was good value and is fully adjustable.
Next week we are getting Stegbar to come and fit mirrored, sliding doors.
Let me know if you want any more detail / pictures
Ben
