Forum Replies Created
If your accountant has never done a tax return involving an IP before are you sure you're claiming all the allowable deductions?
Making sure you claim all the depreciation you can is very important as this is not an out of pocket expense.Here is a link to the ATO site where you can download a paper called Rental properties 2007 – 8 which may be of help to you.
Hello gocoastal
Sorry but no idea what your question is.
Can you please re phrase and expand it.Would like to help
Elkaelkam wrote:Hello aoSS has a forum on commercial property.
Until we start one here that may be a good place for you to start.Cheers
ElkaMy apologies to our hosts on this site.
I feel like the character in "While you were sleeping" must have felt when he woke up.
There is now a forum for commercial property here.
When did it start?
Hello JamieIf, as you mentioned in your other thread about this deal, the lease is with outgoings then surely you don't need to pay the insurance and strata fees yourself ? I mean the tenant need to reimburse you for these.
Cheers
ElkaHello ao
SS has a forum on commercial property.
Until we start one here that may be a good place for you to start.Cheers
ElkaI think Scotts last sentence is the crux of the difference between what happens in the U.S. and Oz. with foreclosures.
I believe that in the U.S. you are allowed to walk away from your house. This means that when the value of the property is lower than the mortgage people just hand the keys over to the bank and walk away. They can't be asked to make up the difference using their other assets. The loss is the banks problem. Correct me someone please if I am wrong.
This is not the case in Oz. Any shortfall on the mortgage is still the responsibility of the mortgagee. The bank can hardly expect to be allowed to sell the property ( on behalf of the mortgagee ) for a " friendly " price to make the sale easy and then go after the mortgagee for the rest.
So no, it's neither the tall poppy syndrum nor 60 minutes. It's that buying at less than fair market price is definately not a help to the distressed seller.
I personally don't understand the logic behind the U.S. system and think that it's this system that greatly exacerbated their housing meltdown.
Hello Soloinvestor
It will also stay CGT free if you move back in within the 6 year period assuming you don't buy another place and declare it as your PPOR within that time.
Maybe you can ring the ATO to confirm all this.
Hope this helps
ElkaWhat's the difference between NG and the following example?
I run a little business ( in my own name).
However, because it's just in the begin years it doesn't earn enough income to support me or in fact to cover it's own expenses so I have a part time job as well.At tax time I declare income earned from both sources and deduct all expenses from the business. Because the business expenses exceed the business income at this point some of these are effectively used to reduce the taxable income earned from the job.
Is that basically correct ? Should we call this negative gearing too?
Sorry newbi2 I don't want to seem contrary but point 3 of your post doesn't apply here.
There will be no CGT to pay when the property is sold if it was rented out for less than 6 years and no other PPOR was claimed.Cheers
ElkaThe point about having a IO loan coupled to a 100% offset account, even for your PPOR, is flexibility.
Please read the following threads where it's been explained.https://www.propertyinvesting.com/forums/getting-technical/finance/4324661
Naturally if the next property you buy is an IP you would first pay down some of your PPOR loan and then reborrow it for the deposit and costs of the IP.
Cheers
ElkaJamesandHannah wrote:I've decided that paying off our 15k car loan first is the way to go.
The second stage would be to
1. Pay down as much on our home loan as possible to create more equity
or
2. Save up cash in the bank for a deposit
or
3. A bit of both
Of the options above what is better for us?Paying off the car loan asap first is absolutale the way to go.
Instead of trying to decide between your points 1,2 & 3 above, my suggestion would be to see if you can convert your loan to IO with 100% offset account.. Rather than explain the benefits again, just do a search on this forum as it has been covered many times before.
"The bank will only take into account the purchase price on the contract as marked price, no matter how much the 'real' market price is."
Can someone please explain this to me, just can't seem to get my head around it.The bank will only initially give you a mortgage based on the actual purchase price.
For example if you buy a place for $200K even though the "real market value" is $400K, the bank will only lend you based on the $200K.
Of cause after 6/12 months you can have the property revalued and increase the loan.You're doing really well.
ElkaHello JL
Thank you for taking the time to post this for me.
Much appreciated
ElkaHello Angela
I changed PMs on one of my IP's a few months ago.
I advised the old PM that I was changing agencies and who the new agent would be and the rest of the work was done by the new PM. No hassles.
Cheers
ElkaHello Jaffasoft
I believe it was in the March issue of API and that it was mentioned as a hot spot for property under $200K.
At least that is what I have been able to find, searching through forums, but not why.
Would you have a copy of that issue?I also think that the region is very depenent on a solution to the drought problem.
Cheers
ElkaI agree with you about growing equity over time duckster and use my offset accounts in the same way as if I was putting it directly into the loan i.e. this is not spending money unless it's for another investment..
Of cause you need to be very disciplined financially otherwise you are better off putting it into the loan so you won't spend it on lifestyle.
A big advantage of having funds in an offset account is that it can also function as your emergency money.
If you loose your job, or all your tenants at the same time, or the interest rate rises start to bite you can use this money to continue servicing your loans till the problem is resolved.Hello Kathy
Basically if you use a IO loan and put your spare cash into a 100% offset account coupled to this loan you achieve the same interest reductions but keep your options open.
Obviouly if you have a PPOR ( non tax deductible interest) you should have this offset account coupled to your PPOR loan.
Here is a link to a thread that also discusses this question.
https://www.propertyinvesting.com/forums/getting-technical/finance/4324661
Hope this helps
ElkaHello Mini
The "only catch is….." statement relates to the 6 year rule Kevin mentioned in the first paragraph of his post.
The rule is that you can rent out your PPOR for up to 6 years without effecting it's CGT free status.
Obviously you can't buy another property in that period and claim it as your PPOR as well.For clarity, you can own another house and live in it and not decide which one you want the CGT free exemption for until you are ready to sell one of them.
Hope this helps
ElkaHello cassowary
The short answer is no.
However it may be worth speaking with an accountant about having your father pay you rent for half the house which should make all your expenses (which would be half of everything except things like water usage, electricity …assuming you are paying half council rates, water charges, insurance, repairs etc.) tax deductible. More importantly your share of the interest should then be deductible.
The rent would have to be at market rate ( or just under …which you could justify because of no management fees, no vacancy periods etc.) and this would need to be declared as income.Also ask the accountant about CGT implications of this for the future. I'm no accountant but can't see that it would make a difference as your half is not your PPOR and would therefore have CGT obligations anyway. However this needs checking.
Just a suggestion
ElkaRyder wrote:I did refinance soon after I moved out, but the bank won't give me the valuation.
But surely they will tell you what it was valued at even if they are not willing to give you the valuation itself.
