Apologies that i'm a bit late to put in my 2 cents…..

However – there are now so many of these property investing crews out there…..
My husband and I went through this EXACT same process! Not with this crew though…. another one in the Brisbane area. I was laughing while i was reading your post bluedog because ours was exactly the same process…. except on the way back to the office where they had arranged for us to have a solicitor to go through the contract with us they stopped off at an atm for us to withdraw our cash deposit! Talk about pressure! This was when we started thinking this just isn't right…. We were a bit new to the property investing game and i guess a bit gullable… It was 5pm, they'd picked us up @ 7am and i was just tired and wanted them to take me home!

However there was a cooling off clause and during that time we did some really good research regarding the area and did our own calculations as to how much we could build it for without their help – we even contacted the same builder who these guys were going to get to build the house and got a quote for a home of very similar size and features. We discovered that there was $40,000 in it for them! I know they don't work for free…. I was happy to pay a little premium in order for them to do the process for me…. but $40k?! Now that is a bit steep. And i'm sure it's even more than that as i've used builders prices to the public – not rates mates i'm sure they have agreed to between themselves.

And from reading other experiences with these guys, it seems you don't really get much assistance for this premium price tag either?

Mel

Hey guys,

I've actually been eyeing off Moranbah for awhile now. We used to live in Mackay so we had a good idea of what went on out there (company's leasing houses for miners) and the higher rate of rent charged.

I've found this thread very interesting – thankyou to all who have contributed. And it has fired up this Moranbah IP idea again.

So i've been doing some research and talking to the local council and real estate agents – and can someone share with me what in the world is going on out there? It may be just RE agents trying to get me excited – however i've spoken to a few in Moranbah and a few in Mackay who concentrate on Moranbah properties and there is NOTHING available to buy or even to rent! I'm being told that the properties are hardly on the market for a couple of days before they are gone! Some don't even make it to realestate.com. I was told by one RE agent that there is another shopping centre being built shortly and a new school (however the council didn't confirm this part) to cope with the growing population from the new mines being opened. Apparently one mine is being opened just near the BP on the ouskirts of town.

So are these RE agents pulling my leg, or is demand far outweighing supply right now?

Hey Ambers,

Well, as your original purchase was for residential only, it's likely it was an input-taxed purchase – which means no GST.

However if you sell a portion with a new dwelling on it, it converts it to a taxable supply (the sale transaction only) – GST applicable. So your sale price would include GST. i.e. if you sold it for $550,000, then $50,000 would be the GST component sent off to the ATO and you would have $500,000 cash left to include in your CGT calcs. Not very pretty, is it?

Selling it with plans sounds good. As you said, no holding costs and it would remain as an input-taxed transaction therefore no GST implications for you on the sale.
But then again, as Steve says: It depends. How much value-adding can you achieve by putting a dwelling on the block? How quickly would it take to sell the vacant block?

Don't forget that there's some great CA's out there too (not just CPA's).

Good luck!

Trusts are entitled to the CGT 50% discount (from holding asset for 12 months or more) just the same as individuals. It's only companies not entitled to discounting (and of course SMSF's only 33.33% discount not 50%)

The main disadvantage of holding property in a trust is that you're not entitled to nominate it as your PPOR – ever.

If the property is negatively geared you'll be accruing losses in your trust which is useless unless you want to use the trust now or later for another business purpose to be able to soak them up.

If the property will be positively geared (or becomes positively geared), you will need to be careful because I think there's a possibility you may pay tax twice on your income. i.e. Hubby earns wage which is taxed in his name. Rent is paid from post tax dollars to the trust and then the net rental income i would presume would be distributed to wife who would then possibly pay tax on this portion of income again (if wife's Taxable Income is over $6,000). Effectively we're creating additional income without receiving any cash in the pocket!

Trusts are also used to help in asset protection (depending on who the trustee is), however if you're renting the property yourself there's no risk of being sued. And if you do purchase further investment properties in this trust, this property you're living in may be at risk.

Have a sit down with your accountant and they can thouroughly go through all the pros and cons for your current situation and come up with a solution also considering your future investment plans.