I wish I had a crystal ball too! My problem with your prediction is that Steve Keen and his disciples were talking about this huge drop in the Australian property market – Keen said 40% – over 12 months ago. It's a bit like the boy who cried wolf. What has happened in the US hasn't had a dramatic effect on the Aust property market over the last…[Read more]

Are you telling me a couple of teachers, earning $55,000 a year each can't afford a house? They might not be able to buy where they want to buy, but they could buy in plenty of suburbs in capital cities. If the Real Estate Market doesn't crash within 12 months, at best it will just stand still, but forget your 10% yearly increase in property.I…[Read more]

jmielle wrote:
The Economy is doomed! http://www.youtube.com/watch?v=HPeu88ibdl8

Most of what is said in this Youtube rant is garbage, and nothing is backed up with any hard evidence. It sounds similar to the doom and gloomers that were on this site about 6 to 9 months ago. Most of whom, incidentally, are no longer here.

If it was outstanding, perhaps the purchaser thought you had already paid it, which is why it didn't appear on the settlement statement. Perhaps, I'm not sure.I think you should do the right thing and pay it.

MsTrump wrote:
My frustration stems from the fact the ATO will be getting something for nothing from me, without lifting a finger to develop the block of land we own or contributing to the process in any way.

That is the same for every business. The ATO aren't on the checkout at Coles or delivering nespapers for the local newsagent, helping…[Read more]

Hi Ms Trump,Richard and crj are correct, if you are developing a property to sell, this income is treated as revenue, rather than a capital gain, and taxed at your marginal rate of tax. There is no way to avoid ALL the tax, but 70% of something is better than 100% of nothing.

If your business makes a loss, you can only offset it against other income if you pass the non-commercial losses test. (Turnover over $20,000, profits in 3 of the last 5 years, etc) Otherwise, a business loss must be deferred until you make a profit.

1) No – If you wanted to claim a percentage of the interest (for the one room being rented) you could, but I wouildn't recommend that, as it would make CGT payable on sale (the same percentage)2) Again no, unless it is being used solely by the person renting the roomAs I read it, you are renting out 1 room of your PPOR, to a friend. Are they…[Read more]

Hi Daniel,I think the use of 'x times average income' is misleading. For example, when my parents bought the family home in 1983, they paid $83,000, and dad's income was about $18,000 a year. This works out at 4.6 times income. Mum wasn't working, so dad's salary was the sole income.When my wife and I bought our house last year, we paid $400k. My…[Read more]

Unemployment is under 6%, and interest rates, even factoring in a 0.5% rise in the next few months are still low. The 'Steve Keen's' of the world were predicting 40% falls in house prices at various times over the last 12 months. It is starting to sound like the boy who cried wolf.

I realise that is the heading on the link, but the information doesn't read that way. So if you and your spouse live in separate houses, you would be up for a portion of capital gains tax on each house, but if you live together, both houses are CGT free? That doesn't make sense to me. The ATO info talks about nominating a house as your PPOR. You…[Read more]

From the same link as mentioned aboveThis rule applies to each home spouses own, whether they have sole ownership or own the home jointly (either as joint tenants or tenants in common).

If you nominate different homes (as your PPoR) for the period and you own 50% or less of the home you have nominated, you qualify for an exemption for your share. If you own more than 50%, your share is exempt for half the period you and your spouse had different homes. http://www.ato.gov.au/individuals/content.asp?doc=/content/36893.htmAs your…[Read more]

Hi Brian & Cindy,Before they were allowed to run their business through a company, most accountants, lawyers, doctors had the business in their name, and the house in the wife's name. Keep them as separate as you can.

Was it your partner's dad's home? Or was he renting it out to someone else?There is no CGT payable if the property was purcahsed before Setember 21 1985.

What Alistair is saying is that the saving is over 30 years, so it is not worth $80k in real terms. My hurried Discounted cashflow analysis, at a rate of 8% suggets it is more like $32k in todays money. Still nice, but not as nice as 80k.

The 18% figure is misleading, because people don't repay JUST the $450,000, they repay about $1.1 million, if the loan goes  the full 30 years. The percentage of savings you calculate should be based on the total repayments. Or, calculate the amount if interest saved.

http://law.ato.gov.au/atolaw/view.htm?docid=AID/AID2001479/00001Generally, yes you can claim the interest. This ATO interpretive decision, based on Steele's case, says that a deduction can generally be claimed for interest (and other holding costs) in a period before it produces assessable income.

mortgagedetective wrote:
So yes, the experienced broker may earn a teeny, tiny bit more and borrowers arranging their NAB Homeside loan can save around 18% of their loan amount if they get it through the right broker.

18% of a $450,000 loan (from your example) is $81,000, yet you say the TOTAL a 4-star broker will receive is $28,435.Could you…[Read more]

The problem you may have is that if you had the funds from the sale to pay out the LOC, and you CHOSE not to, the nexus between the interest payments and the relevant income earning activity will be broken, and therefore not deductible. However, in Brown's case, the monies received for the sale of a business did not fully repay the loan taken out,…[Read more]