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  • Profile photo of drfunkdrfunk
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    @drfunk
    Join Date: 2006
    Post Count: 4
    July 17, 2009 - 12:53 am
    Scott No Mates wrote:
    Adam, is it vacant land? Being rural, capital growth will be very slow and as stated it hasn't been a positive experience to date. It may well be time to cut and run. If it does make a loss, then you may be able to carry forward this loss and offset it against any other capital gains that you make in the future eg sale of shares or other property.

    thanks for the reply Scott.

    yes, land is vacant.
    the land may be hard to shift in the current climate and we would take an approx 30k loss.

    we did buy at a good price at the time but as the market has dropped this has gone south at a rapid rate.

    how long can you carry a loss for?

    Profile photo of drfunkdrfunk
    Member
    @drfunk
    Join Date: 2006
    Post Count: 4
    July 17, 2009 - 12:48 am
    Terryw wrote:
    There is no magical answer. You just have to do some research and make a decision.

    Some questions to ponder
    – do you see the values increasing in the short term? Long term?
    – Adding up selling costs and buying costs how much of a loss?
    – Do you have any other capital gains which you could use to offset the loss? (maybe save some tax)
    – If you invested the $250 pw elsewhere what sort of return could you expect
    etc

    And, btw, are the repayments on the land interest only? If not it probably should be as you still have a loan on your home.

    and, did you know you may be able to claim all expenses associated with the land (rates, interest etc) if it was your intention to build a rental property?

    thanks for the reply Terry

    here's some history…land purchased for 110k in a new subdivision on the banks of the Avon river in Northam.
    did seem like a good idea as the land was cheap and we were hoping for a 3-5 year turn around.
    it seems that all blocks were purchased by investors as there has been no building here at all.

    circumstances have changed quite dramatically as my wife has finished full time work as we now have a 1 yr old and another on the way.

    Ok…. here's the answers to your questions…..

    short term is not so good in the current market.
    long term will hopefully be better as there is talk of a new mine in the area….but how long?
    adding up selling costs and buying costs, i guess we would be looking at a $30k loss…if we could sell it.
    we have no other capital gains…
    250 a week on our PPOR mortgage would help reduce that at a much better rate.
    yes payments are interest only but i pay more….should i reduce?

    how about finance options or perhaps a good financial advisor
    we are currently with a credit union that we have been with for years and get really good service.

    as far as claiming for anything….is INTENTION the key word here?

    i guess what i'm also trying to get at is whether this land will make any difference to us getting another IP that might actually work for us?

    thanks.
    Adam

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