This seems to be popping up a lot lately. As Terry said, the legislation and ATO information do not specify a minimum time for you to live in a house before it can become your PPOR.

I can't see a 'bursting' of the bubble, but can see a deflation over the next year or two. A burst probably won't happen for a because of unique cultural and legal reasons. Australia has one of the highest home ownership percentages in the western world (about 70%), and one of the lowest rates of mortgage defaults. This isn't the USA, where you…[Read more]

Hi there,I'll try and answer your questions.1)  Correct, only profit can be distribuited from a trust, and losses stay in the trust, to offset future income. The trust doesn't pay tax, it distributes profit and the beneficiaries pay tax on their share of income. But as there is no profit being distributed, there is no tax payable. The losses in t…[Read more]

dannyde wrote:
Thanks for the info. Currently we are actually renting and the lease is in her name only. I have allocated my PPOR to another property (land tax purposes) that i own. We are not buying anything, but I thought (was under the understanding) that if she was to move back into her property prior to 6 years and live there for another…[Read more]

Not necessarily.Are you buying or renting your home? If you are buying, and your partner is living with you in a domestic relationship (married or defacto), you can choose to have different main residences. BUT, if you do, YOU would be up for a portion of CGT on your PPOR, as (I presume) you own more than 50% of the home. Your partner would also…[Read more]

elliotjl wrote:
On this topic. My wife and I now both own property. She purchased 1 before we got married, lived in it for 12 months and has recently rented it out. Her property was purchased 18 months ago.  And we are settling on a PPOR this week. Does this mean potentially we have access to 2 6 year exceptions from CGT, as the PPOR will be m…[Read more]

MichaelGG wrote:
Hi Dan, Thanks for sharing. By using trust and company, there is the higher maintenance costs. Plus, no 50% capital gain discount entitled. No access to loss. Therefore, the reason that people using this structure is mainly to avoid risk? High income earner should buy couple negative gear investment under their name. And, they…[Read more]

MichaelGG wrote:
Boogz & Paul, Thanks for your reply. Boogz, I was thinking to use my company. But, I just found out it was not a good way to protect yourself. $1 company should be set up as the trustee. Cause it will control property but not own it. Correct me if I'm wrong. Paul, Would you mind to share more info to this kind of insurance…[Read more]

Hi James,You only need to register for GST if you are carrying on a business, and your turnover from that business exceeds $75,000. Also, turnover does not include any 'input taxed income', such as residential rents or interest.If you are doing renovations to residential property, then generally you would not need to register for GST, and, from…[Read more]

According to the MFAA, the average life of a mortgage is 4 to 5 years.

mortgagedetective wrote:
Thanks Terry,Another broker has provided me their book data ($b) in operation for 8 years which shows less than 0.05% of their book refinancing within that time. Of those that refinanced, the average life of loan was still closer to the 5 year mark, which means their moving average is more like 7.98 years and…[Read more]

keiko wrote:

stately wrote:
Hi Rebecca, I thought that if you sell property with in 12 months you are up for the full Capital Gains Tax but if you sell it after 12 months you are up for HALF the Capital Gains Tax. Thats my understanding. Cheers

yes thats correct but if you live in the house for more than 12 months then you pay no tax but if…[Read more]

Hi Rebecca,Firstly, if the block is sold as is, you will be up for Capital Gains Tax on 50% of your gain. But all of your interest, council rates and land tax add to the cost base. So the capital gain will be reduced. (This is assuming it hasn't been deducted already, and seeing as it is a block of land, it probably hasn't)ie: Purchase $310,000,…[Read more]

ryan mclean wrote:
Can you set up a discretionary trust with friends that are not relatives?

Yes, you can, in most cases.A discretionary trust deed lists who can be a beneficiary of the trust, and usually allows for a large amount of beneficiaries. I have seen one trust deed that lists a beneficiary can be 'anyone on the electoral roll'. If…[Read more]

To clarify, if you rent your PPOR, you DO NOT qualify for the 6 month overlap provisions in the main residence exemption.

Benjamin Csikos wrote:
You need a license to hunt down cashflow positive properties?Come on now. Anyone can spend their day surfing the internet and hunting through property websites, and then pass it to a friend. Why would you need a license for that?

Because he's charging 100 bucks a month! You need the licence when you are charging people…[Read more]

Hi Tambo,

It depends on where you will be living while your PPOR is being rented. Are you pourchasing a new PPOR to live in, or are you renting?

You can only have one PPOR at a time, so if you have bought a new PPOR, then you would be up for a small amount og CGT.

Get a valuation when it is ready to be rented, then your CGT is the difference…[Read more]

Terryw wrote:
Hi DanWhats the diff between splitting and cloning?

Hi Terry,Trust cloning is where a new trust is formed, which has the same trustee, beneficiaries and terms as the original trust. It is a 'clone' of the first trust. There used to be a trust cloning exemption, allowing for the transfer of assets from the original trust to the…[Read more]

Terry's right, trust cloning no longer exempts the transfer of an asset for CGT purposes. Trust splitting can be done transfer an asset without triggering CGT or stamp duty. If you are wanting to investigate this further, best to take your trust deed to a tax lawyer and have them set up the new trust. Although after seeing the tax lawyers fees,…[Read more]

I would have a separate trustee. Why risk it? For $1000 (approx) you can have a separate company as trustee, reducing the risk of assets being seized.