I am guessing Steve meant using delayed settlements (which defers Stamp Duty here in VIC). Check with your relevant state revenue office to see how it works in your state.

I think the lucky people in NSW get to pay SD within 30 days of signing the contract regardless of when they get the property.

Alternativley you could explore the use of an option to get the same result.

Or you can just not pay the revenue office the SD and wear the cost of their penalty interest. I have heard of a developer who was happy to do this as it helped his overall cashflow. Of course he paid the SD later when things freed up – but it allowed him to complete the deal.

Hope this helps,
Greg

Property seminars are still tax deductible BUT as always very strict criteria apply. In this case the AAT ruled that the taxpayer was not conducting a substantial BUSINESS of property investing. It did not dipute that he was a property investor.

It is difficult for ordinary taxpayers to claim deductions for education expenses, unless they are already generating income in that area. The ATO has not changed its position on this.

Also just because you pay for something through your company does not make it automatically tax deductible.

In reality, because our tax system is honesty based, you can claim everything and anything you like – but on review your claims will be disallowed and penalties applied.

Cheers,
Greg.

Insurance will NOT cover you if you are criminally negligent.

Imagine this: You are involved in a motor vehicle collison and another party ‘alleges’ injury and sues you. It is found that the tyres on your car are unroadworthy.

In this case your insurance company will run a mile and tell you that you’re on your own. In this case it doesn’t necessarily matter who was at fault in the accident.

Those investment properties in your own name are up for grabs.

Cheers,
Greg

Any thoughts on why a RE agent should be paid a percentage as opposed to a flat rate?

I wouldn’t expect a mechanic to charge me relative to the value of the car I drive…

Imagine if solicitors conveyancing was a percentage of the contract price! And, why not the removalists and carpet cleaners..

My point is most people and businesses work for an hourly rate.. So why is it that RE agents feel their fee should be associated with the contract price of the property?

Cheers,
Greg

Hi Robert!

In Victoria that is exactly what it says in the Instruments Act. But there was reently a case that went through the courts where they ruled otherwise. After negotiations an agreement was reached and the details jotted down on a bit of paper. Then the seller (If I remember corectly) decided to back out as they realised they could get more fpr the property. The purchaser pursued it and they won – the court ruled that they had in effect made an agreement.

My point is: If you make a witten offer with no expiry then, in theory, the vendor can come back to you at any time and accept. Too bad if in the mean time you have purchased elsewhere. You are leaving yourself exposed.

I always include an expiry and I give a reason for it (ie I am looking at another property and if I don’t receive a response in 48 hours then I will submit an offer on that property).

It is basically a reversal of the RE agents game of ‘oh, we just received another offer on that house and while I can’t tell you how much it is, I can tell you it is more than your offer. And, just because I want to do the right thing by you – I thought I’d call and see if you wanted to submit another offer…’

Hope this helps,
Greg

Damien!

A similar question was aked a while back and, as I recall, people in the finance industy suggested paying back the debt at the minimum amount per week – not as a lump sum. They said paying it back as a lump sum would not necesssarily help you get approval for a loan. (Try doing a search for it).

You can still get a copy of your credit report from baycorp advantage for free – but they won’t post it until 10 days have past. While if you pay the $27 you get the report that day.

Cheers,
Greg

I agree with Terry – if you have an accountant set up a trust for you they will most likely either order it over the net or go to a legal firm that specialises in incorporating and selling shelf companies/trusts.

So basically they are just taking you details and placing the order on your behalf. So like you said this requires very little training or understanding.

As I understand it the costs of setting up a trust/company etc are treated as capital in nature (ie you can’t claim them unless you sell the business at some point).

Cheers,
Greg

Hi George!

Sounds like you intend to skate on some mighty thin ice!

You need to consider the “Sole purpose” tests for SMSFunds. To sumarise this means that the investment must be soley for the purpose of providing for your retirement. If you or a related party/entity also benefits from the investment you have failed the sole purpose test.

An example is if the SMSF buys artwork and you hang it in your lounge room. This fails the test as you have personal enjoyment of the artwork. Same applies if the fund buys jewellery, which you/or your wife wears. Shares in a golf club or yacht etc which you personally use.

Anyway you get my point. The ATO are all over this sort of thing and will punish you hard.

They will deem your fund as being non-complying and instead of paying a benifical tax rate of 15% you’ll get to pay 47% tax on the total assets in the fund. (Be VERY clear about what this means – The ATO takes half of everything the fund owns!)

If you want to pursue this I recommend you get very, very good advice and I would start with Chris Batten. I understand you will need to be prepared to pay for his advice though.

Keep in mind the ATO have retrospectively changed laws regarding SMSF to cacth people who dabbled in the grey areas. So while it might work now – you might find yourself back peddling and selling at a possible loss in future to avoid penalties.

Good Luck,
Greg

Do ring Tony Cordato as he does indeed know how you can resolve this problem.

Also, I agree with Terry these departments might have internal policy – it will always be written down and just because they do not publicly announce it does not mean they will not send you a copy if you ask nicely.

For example the Vic FHOG application includes a list of of Id you need to supply. My purchaser had lost his wallet and did not have the necessary ID listed on that form. On request the SRO sent me a long detailed list of items they accept, which don’t appear on the FHOG form.

Cheers,
Greg