Terry – I think you have nailed it. We do NOT want to use our SMSF to borrow. The SMSF is just contributing funds. I think I might not have been clear enough about that in my initial post.

The plan would be that the SMSF simply contributes cash to the deal (through buying units in the unit trust). We would personally borrow from the banks in our…[Read more]

Freckle – I agree the building industry is in trouble (especially in Vic). It is not just developers but builders as well going under.

On the positive it means there will be less competition for good sites. I think a lot of the developers are in trouble as the banks have changed their appetite for risk. Having a business plan which assumes you…[Read more]

Thanks Freckle – I had a look at that website.

How do you see he mitigates the risk? I assume you mean the risk is reduced for himself as the developer?

Greg

Thanks – great list to use a starting place.

I think my initial post was not very clear. The SMSF will not be buying the property so your point 4 (the second one) should not be applicable.

To clarify – the plan is that the SMSF invests money into a property development that we purchase in a different strucure.

I think the issue is more your…[Read more]

Dan42, appreciate the tip. I am very wary of getting tangled up with the ATO for breaching a rule. Can you suggest any SMSF experts who could help us out?

Greg

Freelife – Thanks for the article. We do have something similar in mind for future developments once we are more established.

However, the current goal is to figure out how we can do it considering we are all family members. I assume that adds a level of complexity under the 'related parties' type rules. Can you point me in the direction of any…[Read more]

Thanks wilko1 – a very interesting read. Concerns me a bit that the document was published in 2005, so much may have changed since then. SMSF rules seem to change every week.

Terry, The SMSF will not be purchasing the property so I don't think it will be accused of being in business. Rather the SMSF will be investing money into a unit trust which is where the property will be purchased.

I am concerned about getting this correct – so if you can suggest any names of people who specialise in structuring investments to be…[Read more]

Thanks for all the help.. They think it is the refinance is a magic bullet that is going to cure all of their problems.I just wanted to get an idea of how much money they could get (depending on valuation) to try and give them a balanced view of how it will look. They hadn't factored in all the fees and as such thought they could pay out more…[Read more]

Thanks Richard, some good info in that post..You are right they are currently with the NAB and that is why they want to refinance and stay with them (Better the devil you know, I guess).I am still a little unsure of how much money they will end up with to pay out the other debts.. I understand that there is a cost of approx $600 and there is no…[Read more]

Hi Elizabeth,I have done a few wraps in Vic, I'm not an accountant but I'm happy to share my thoughts.If you signed a wrap contract with your father it is most likely he would not pay CGT on the property. However, he would most likely pay income tax on the profits. If you wrote the contract so that there was no profit (ie you are simply covering…[Read more]

Must have been typing as you posted LA Aussie..

I agree totally it is a false economy.. You have to think about why the government (Tax Office) allowed normal employees to claim vehicles as tax deductions back in 1996 (I think)..

It has boosted the GDP (making people spend more) and boosted the car industry.. Plus people feel richer..

As I…[Read more]

I have leased a car about 6 years ago through my employer and I personally wouldn’t do it again..

Since the top marginal tax rate back then was $50,000 it made a lot of sense.. But now the top tax rate kicks in at $150,000 and has been reduced to 45%.. You have to do your numbers and even with after tax contributions for FBT it may be marginal if…[Read more]

Hi Guys!

Can someone give me an indication of the interest rates I could expect on both a No Doc with a 70% LVR and also one at 80% LVR..

Prefer to stay away from Lo Doc because of the need to state income..

Greg

Hi Henry!

No matter what price range you are in the fundamentals are similar. Bottom line is you have to purchase the porperty at a good price in the first place. Personally I would consider wrapping below $200k to be a cheap house – especially these days.

Greg

Hi Caston!

I would wrap a commercial property to you (if I had one!) provided my position was secure. You would need to provide me with sufficent deposit and possibly (depends on circumstances) a personal guarantee or caveat over something else of value (possibly your family home – depends on existing LVR/equity).

Provided my position was…[Read more]

A ‘Put & Call’ option is often used to shift the capital gains tax liability into a more favourable year.

CGT is based on the contract date – NOT the settlement date. So if I know that my income is going to be high this year and lower next year, then if I can choose I would prefer to pay CGT next year.

Often used in commercial and by developers…[Read more]

Originally posted by carl_vic:
What about this then; Say the company that is to be the trustee existed before the exchange however the trust did not. The contracts are signed either in the company name, or ‘and/or nominee’. Between the exchange and settlement a trust is created with the company as trustee. At settlement the appropriate paperwork…[Read more]

One of the legal experts can sort out whether I am on the right track here..

Despite most peoples belief ‘Title’ and ‘legal ownership’ are not strictly the same thing. When the contracts are signed and accepted you have a interest in the property, as an owner, even though you have not paid yet.

So you can’t sign the contract then run off and set…[Read more]

Hi Guys!

Thanks for the replies. A question on LVRs..

When you mention 80%.. Is that based on the completed market value of the house and the land or is it based on the actual construction costs of the house plus the land value.

They have borrowed from Westapc to buy the land, but may need to go elsewhere if it will be difficult to owner build.…[Read more]