It depends on a number of questions:Firstly, you have mentioned your intention was toi live in the property. You therefore weren't developing with the goal of making a profit. Also, it is a one-off development, not an ongoing business.I think you would be fine to argue that you are not in the business of developing property, so no GST should be…[Read more]

Yes, it would be deductible. But as a borrowing cost, it would be deductible over five years. It would not be 100% deductible in the year of re-finance.

Yes you can cliam expenses as long as the property is available for rent. As for improvements, they may be classified as initial repairs, and would have to be depreciatede, rather than deducted outright. You might get away with painting, but replacing the gutters and restumpoing the house would most likely be classified as intial repairs and form…[Read more]

In short, yes. If you can make an argument as to why the interest is higher than normal (unsecured, short term etc) then you may be ok. 150,000% is probably a bit excessive, though.

Generally, if you are travelling to view a property you are planning on buying, you can't claim the car deductions. The reason for this is that the expense has been incurred 'too soon', because there is no income to offset the expense against.You can claim car expenses for visiting properties you own, because the expense is seen to be incurred i…[Read more]

Hi Woodie,I think the Westpac offset account is a everyday transaction account, but I'm not totally sure. The finance gurus will have some more information.

Woodie wrote:
What do you see as a deficiency in the CBA offset account?

It's not a full transaction account, deposits and withdrawals havea $500 minimum, and an initial deposit of $1000 is required. Its called a Mortgage Saver, and to withdraw money from this, you need to transfer it to a Streamline account, then to whoever you want to…[Read more]

It depends what state you are in. I'm pretty sure you can't do that in South Australia. Let's say you offer $182,000. What's to stop the agent from going to prospective buyer number one and asking them for a higher offer? Then the agent is running some sort of quasi-auction.

The test for deductibilty of interest is what were the funds used for. If you pay out the 20% LOC on the sale of your PPOR, then that loan is paid out. Any new loan will have to satisfy the same test. If you borrow the same 20% again, what would the funds be used for? They wouldn't be used to buy the IP, as the IP has already been purchased. As…[Read more]

Hi Emma,Firstly, yes, you are correct. The sale will be CGT free up until March 2013 OR you buy a new PPOR. On the subject of advice, your accountant would be able to talk you through the positives and negatives of selling the property, and keeping it as well, One thing I will say is that buying and selling property, even if there is no CGT, is…[Read more]

Thanks Terry,That was my concern as well, that the majority of my income would be coming from a discretionary source. But as director of the trustee compamny and appointor of the trust, I should be able to get some money into my own name!

To answer question 3, yes, your deduction for interest is limited to the interest on the $170k to buy the first property. Interest deductibilty is determined on the purpose of the loan, not the security offerred.

If its only six years old, then it's definitely worth it. The building allowance alone would more than pay for the cost of getting the report.

If you haven't claimed any GST on the purcahse, and you have to pay GST onthe sale, then you are eligible to use the margin scheme. Depending on whether you bought the property pre or post July 2000, there are different ways to work out your 'cost' for margin scheme purposes. If it was post July 2000, then the cost for margin scheme is what you…[Read more]

If you haven't paid and claimed a GST credit on the purchase, then you can use the 'margin scheme' to reduce your GST liability on the sale. If you bought the land after July 2000, using the margin sheme would mean that you would pay GST on the difference between the sales price and the original cost price. From your example above, The GST would…[Read more]

KRB,If you spent more time here, rather than just supporting your WAG mates, you would know that Richard has many properties. The fact is, if a business is developing property and then trying to sell that property to their 'investor education' clients, then they have a conflict of interest. Do you go for the highest price possible, and charge you…[Read more]

kum yin lau wrote:
Hi losty, your case made me really look at the numbers.It's so simple it's almost idiotproof.$9000 p.a. = $750 p.m. x 2 = $1500 p.m.Accrued         interest          tax saved$1500            $6.25              $31.25$3006.25       $12.53           $31.25At the end of 15 years, the total accumulated is $744430.50That doesn&#03…[Read more]

As Terry has said, the short answer is Yes.The long answer is YYYEEEEEESSSSSSSSSS

Hi kmuki,Firstly, the question of increased borrowing power of a trust has been discussed on this forum by many of the mortgage brokers here. The consensus seems to be that a trust can not borrow any more than an individual can, due to the personal guarantees required, and the disclosure of these guarantees.A Family Trust, especially with a…[Read more]

Yes, the website is definitely legit. We sometimes get legal documents from them for our clients.