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You have to live in it for six months within the first twelve months to qualify for the first home owners grant.
To gain a PPOR exemption you must be able to prove via records that you actually lived in the house as your main dwelling.
http://www.ato.gov.au/individuals/content.asp?doc=/content/36883.htmsix year rule on keeping ppor while renting it out
http://www.ato.gov.au/individuals/content.asp?doc=/content/36887.htmHowever you cannot claim two properties as PPOR only one so if you buy another house and lived in it it is not PPOR if you are treating other original house still as PPOR.
It is now referred to by the ATO as Main Dwelling rather than PPOR.Apparently if you move in for a 6 month period within the first 6 years you can claim a pro rata principle place of residence Capital Gains Tax exemption for the time you were living in it? Is this true? I do not want this to happen once I sell. I do not want to pay any CGT on this . Does this mean I have to move in as soon as settlement occurs?
answer . YES if you move in after you rent it out this will occur and the 6 years you refer to is connected with the choosing PPOR exemption as pro rata will be for anytime period if you have rented it out.
SAY you rented it out for 10 years then moved in for 2 years and then moved out and claimed ppor 6 year rule after this
this is how it would work
10/18 of gain – cgt liable
2/18 of gain exempt
6/18 of gain exempt as you choose to keep PPOR exemption for 6 years
it is calculated on the days / total days I just am too lazy to work out the exact days.
http://calculators.ato.gov.au/scripts/axos/axos.asp?CONTEXT=&KBS=CGT_and_real_property.XR4&go=ok
http://www.ato.gov.au/individuals/content.asp?doc=/content/36888.htmNot sure on how you chose to make it still PPOR your accountant may know this.
Speaking to someone from England – Television may operate on a different radio frequency range.
I am assuming it is in Maribyrnong Victoria.
Important points are is it near infrastructure
Yes – Train line
Yes close to CBD 11 k/m's
Yes- highpoint shopping centre
yes -golf course
Yes – heaps of park reserves near area
yes – close to flemington race track
yes – close to river
yes- close to flemington show grounds (Melbourne show)Buying in eastern suburbs is expensive main thing is to get into the market and pay off the loan and build equity. You can always sell later and buy something bigger when kids come along. Probably around 4 to 5 years of age schooling needs to be considered with kids. Also if kids are 12 months old look at booking into a kinder early.
Stamp duty more like $37,000 if on $700,000
http://www.sro.vic.gov.au/SRO/SROCalcs.nsf/transfer?OpenForm
if 500,000 then $21,970
$400,000 then $16,000
not sure if you can pay it on land only or if it is charged on whole land and building package ?
And payable LMI of approximately $20,455 based on 95% LVR
http://www.inmortgages.com.au/calclmi.htmCan't answer your question as that is giving financial advice which requires an expensive licensing regime thanks to ASIC
I am not licensed to give financial advice.Get as much work experience related to your degree as you can.
Graduate recruitment are very self centred towards graduates having experience.
You may be able to lower your on campus study load and still work.
I made the mistake of doing my commerce degree ASAP and then found my marks were not high enough, my age was too much, my weight was to much and my experience was not enough. Still looking for work of any kind. Wish I had done an apprenticeship instead of University.I remember the recession we had to have- Prices of property can go down.
As we now have foreign investors they will have currency risk.
As the interest rates increase so to will deposit interest rates. This will make money come into Australia from foreign investors and change the exchange rate. This could affect foreign investors interest costs.There is a danger of a property bubble occurring.
As prices go higher and higher the rent that people can afford to pay is limited to the market price.
This reduces the return on investment for new investors.
This makes investment in property a low yielding investment compared to other investment.
If interest rates go higher home buyers will be under stress.
The RBA is about keeping inflation at 2% to 3% so that the growth of the economy is sustainable.
If prices of houses keeps rising people will demand higher wages and inflation can take off.
Interest rates then increase and then home buyers sell because they can't afford the interest payments on their loans.
Supply goes up as lots of distressed home owners sell and no one buys due to high interest rates so demand is lower.
Eventually prices drop.Garage sales. Look in Local Leader Newspaper and Herald Sun maybe advertise where they are.
Dave you will find 5 pages of places with the link below!
http://www.bargainshopper.com.au/Default.aspx?PageID=1323689&A=WebApp&CCID=3321&Page=1&Items=10
Can't find the cow shed may have gone out of business as web site not coming up.
Phone first so you do not make a trip for nothing!This varies from State to State. Check out http://www.firsthome.gov.au/ and select which State you are in.
Will the vendor lend you the 20% as vendor finance ?
Since the financial crisis valuers are being more conservative in their valuations.I would factor at least a 5% increase per year in expenses.
Land tax I do not really have a clue on but probably 9% p/a as land value can increase by this amount on average.
And also factor in misc repairs. say $1000 per year per unitSorry I didn't explain how it devalues the primary property.
Due to the loan being secured over the primary property which will eventually end up with half the land value.
You may be able to discuss with the lender about securing the loan over the two new land blocks.When you sub divide you will have to talk with the lender as your 95% LVR will change to a higher amount and they may not be happy with the value of the property decreasing while the loan stays the same. (Yes you may be putting the sale amount off the loan but there will be a time lag of 3 to 6 months before this happens and the lender may kick up about this temporary situation)
May be a property maintenance company can help your situation as you are remote.
http://www.greyarmy.com.au/?gclid=CLjQ6tyZ06ACFRTSbwod8WbIrwHave you tried hire a hubby http://www.hireahubby.com.au I have found them to be reasonable on their quotes.
Always get a least three quotes on the work required if you can arrange quotes.
Have you tried
grey army
http://www.greyarmy.com.au/
I used them before the company franchised out to the vast network it is today.donkey33 wrote:Hi all. I don't know what to do.Have loans with a basic interest rate around 1% lower (Bankwest) but these will revert to normal variable rates within the next few months. I have spoken to the bank and due to the size of the loan and me paying on time, they would keep the rates low for another 2 years if I want. These loans come with no offset account though.
Now I don't know what to do. I have excess cash just sitting around and I'm unsure whether to pump it directly into the loan (they allow this and allow re-draws but at $80 a pop, I'm not interested),
If you redraw the money later and want it to be tax deductible the purpose of the redraw has to be for investment purposes.
donkey33 wrote:or leave as is and set up an offset account and leave the money in there. Might be paying a higher rate though.
I'm more interested in how this affects me tax wise as I've read it's better to leave the loans alone and pay the interest for tax purposes.
If you have an offset account (make sure the balance comes off loan when the loan interest is calculated)
So you reduce your loan interest by say as an example $20,000 you save $23 a week in interest (6% p/a) $1200 per year.
If you can have your wage put into the offset account then this is reducing the interest also. It may be for a short time but if you have the financial discipline to put all your day to day expenses on an interest free 50 day credit card and pay it off in 50 days you can have more money reducing your interest on your loan on a daily basis.
You will reduce your loss from your property but lets look at this more closely.
Do you know the tax scales?
$34,001 to $80,000 tax is 30%
$80,001 to $180,000 tax is 40%
http://www.ato.gov.au/individuals/content.asp?doc=/content/12333.htm
So if you earn as an example $79,000 a year as a wage then you have to lose $100 from your investment to get back $30
So you just lost $70
or if on the higher bracket you just lost $60
Lets say you saved $100 from the offset setup – You have to pay $30 in tax but keep $70
if on the higher bracket you just gained $60
This gain reduces your loan as it will have a compound effect over the term of the loan if repayments are not reduced.donkey33 wrote:Is there any difference if I pump a lump sum directly into the loan which lowers my repayments vs pumping it into an offset account which also lowers my repayments?The difference is flexibility in what you can do with the offset money at a later stage without affecting tax deductible status
(you cannot have more in the offset than the loan amount also)
A redraw would have to be used for investment purposes to gain back the tax deductible status..donkey33 wrote:Any help is appreciated as I'm not sure whether money in an offset account means for tax purposes, the interest is still calculated on the entire loan.Depends on type of offset account (make sure the balance comes off loan when the loan interest is calculated)
(some offset accounts pay interest on the offset account balance and then reduce the loan by this lower interest rate rather than reducing the loan balance for higher rate loan interest calculation !BEWARE! of this subtle difference !)donkey33 wrote:Not sure I can see the difference but there must be some reason it isn't as good an idea to directly pay off the loan.
ThanksHopefully my above explanation has shed some light on the differences.
lalcorn wrote:It's not worth the hassle of moving just for the sake of moving and living in "your own place".If the numbers stack up on the property as an investment (when it comes time to move out) then it could be a good idea.
If you are moving away from what you know and enjoy for little or no real monetary gain, then why do it?
Don't forget to factor in the costs of moving (time and money) as well as the addition of STAMP DUTY to the cost of the property. on $500k there is about $25k in stamp duty. How many months of rent does $25k buy you?Your husband may perfer to pay a little extra for a better life style and enjoy the area you live in. Perhaps that money you have could buy a positive cashflow property with growth potential?
Just my thoughts.
At a 95% LVR they will be up for mortgage insurance as wel
How much is this going to cost lenders as from experience licensing is never free when dealing with the government.
As it is superannuation you might need to investigate if this is a prudent place to go
http://www.apra.gov.au/contact/form.cfm
or
see this site also
http://www.fido.gov.au/fido/fido.nsf/byHeadline/Complaining%20about%20companies%20or%20people%20FIDO%20versionIf you take out 100k for PPOR it will be for private purpose and you cannot claim the interest charges as a rental income expense.
You may also become un-able to claim for the first home buyers grant by renting out a property first
You need to check this out with the state revenue office you are living in as this varies with each STATE.
You can borrow up to 80% LVR as a line of credit if in the future the property increases if you can afford the servicing.
So say if in 5 years time you have a property worth 650k and the loan was say 380k
LVR = Loan to Value ratio
LVR = 80%
650k * 80% = 520k
So subtract debt of 380k = 140k
so you could in this scenario borrow 140k as deposit for next property if you can service extra debt of 140k
But you can only claim 380k of interest charges
and the 140k is private use.Are you referring to capital gains tax?
There are a number of elements to the cost base for capital gains tax.
(cost base is subtracted from capital proceeds to work out gain)
http://www.ato.gov.au/individuals/content.asp?doc=/content/36557.htm&page=2&H2You cannot claim to reduce your normal income tax unless the property is producing an income (rent).
Also you can't claim expenses by adding to cost base if you are trying to claim expenses against rental income either
(known as double dipping)Capital gains is not regarded as income by the ATO in regards to claiming expenses against other earned income – when it comes to reducing income tax
If you made a capital loss you can't reduce your income tax either
even though they add capital gains to your assessable taxed income and work out your new tax amount.This is based on pre – henry tax change tax laws that may change due to the henry report on the way Australians pay tax in the future.
Mortgage Insurance is another cost if LVR is >80%
Solicitor Fees or conveyancor fee
