Forum Replies Created
What Richard says above is correct, the only issue I could forsee in doing this though is if you came to some arrangement in this way you may save some Stamp Duty now but lose out down the track if you should sell it with Capital Gains Tax. Think through the whole process and plans and goals you have for this property before jumping into any decision.
aaabbbccc,
If you're going to be living in this place for 5 years buy it in your names as GOM & Quickchick say above. Don't go Family Trust with it. Leave that for future IP you won't live in and ask you accountant to explain the Family Trust set up to you.Mick
aaabbbccc,
As you can see, opinions differ from person to person and that is why we suggest you find a good accountant. Be sure to interview them and find out thier specialty and certainly recommendations in this case are great. If you're going down the track of becoming an investor, start investing now by finding a good accountant. It will make life easier down the track and help you get set up in the best possible way to see your goals become reality.Mick
aaabbbccc,
The property doesn't have to be in both names to get the laon in both names and you can also choose a % of ownership when in both names. Our first property was owned 95% in one name and 5% the other to help us with tax issues.My advice for you if you are going to be a successful PI is find a good accountant who is also an investor.
Mick
Re Land Tax, a lot depends on how you purchase, i.e. your own name, Family Trust, Company? I can tell you Land Tax is paid annually, billed to whoever owns the property on Dec. 31st each year. It is fully tax deductible as are any expenses relating to a rental property. Victoria has a Land Tax free threshold of $250,000 for personal owners. Go to http://www.sro.vic.gov.au/SRO/srowebsite.nsf/taxes_landtax.htm and it will clarify it for you.
Hi aaabbbccc,
Some things to think about re family trusts. If you purchase in NSW or Victoria you will definitely incur Land Tax as Trusts do not attract the under $ exemption. This could cost you $000's per annum, not to mention what your accountant will charge to do your annual return. We pay approx. $2,500 per annum for ours and personal returns x2 so as you can see, the $ begin to add up. I agree with Quickchick that the apparent best way forward for you is to purchase in your own name. If you decide to sell after you've lived in it for 5 years any capital gain will be tax free and if you choose to rent it out capital gain is only calculated on the value when you vacate to when you sell. It means getting a valuation but will save you mega bucks! By the way, we've owned 19 investment properties and currently hold 10.
Hope this helps!Mick
As a property owner in Dysart (of 3 rentals) I believe the housing price decrease has much more to do with the ex housing commission homes flooding onto the market at just the same time as the "Global Financial Crisis" began to affect mining stocks and bringing on a lot of fear. Our experience is that companies like BMA are snapping up rentals being offered to them and other companies we have as tenants didn't seem to blink when we increased rents substantially. All that says to me that these companies still have a great deal of confidence in the mines around the Bowen Basin and aren't planning on going anywhere. The quicker confidence returns to property owners and the panic of needing to sell passes, I'm sure things will turn. How can anyone complain when you can buy a place for under $400k and rent it out for $1,000+ per week. That's a return of 13%+. With shares going backwards and banks offering something between 4-5% I know where I'll keep investing! Get over the fear, take a risk or two and start living!!!
I would strongly suggest you commence by buying Steve McKnight's book, From 0-260 Properties in 7 Years. You'll learn stack from it and I'm sure get some good direction for around $30-40. As others have said, you do need to get out there and start buying but beware, lots of people have bought dud deals so education is important. Not everyone is gifted with great wisdom in the area of property investing.
Jason, we're currently doing due dilligence on a possible deal of 8x 2br units. Fire will include hardwired smoke detectors to all units and interior brick walls need to go all the way up to roof. We've discovered section 94 fees will need to be paid on each unit, some $8k each, that's $64k on the deal we're looking at, plus the costs of surveyor, and other council fees. We could be looking at around $80-90k just to strata or around $10+k per unit.
Make sure you do all your due dilligence before committing.Mick
We use Depreciators everytime and find them to be great. Easy to work with, reasonable cost and increases our % return.
Mick
I agree with Ross, you don't need to register for GST unless you are going to get into developing and selling. Standard residential rentals do not attract GST.
Mick
Just a thought with retiling, you can simply retile over the old ones, no need to remove and a job I saw recently looked great! Tiling is quite a simple job if you have the right tools. Hiring a cutter may be best.
Mick
I'm sure you can advertise the place with the details, street and suburb and when available and what can anyone say. You haven't identified the exact property so they can complain as much as they like.
I'd be doing a very thorough inspection upon settlement, the very day and getting onto solicitors the same day if you discover any issues. We've certainly done pre settlement inspections before with no problem but the comments about the property not being yours until settlement is true. Hang in there and be prepared to get in as soon as you can to see if they are trying to hide anything.Mick
Richard, whether you have IP's in a trust or not, you can't avoiv CGT. How can you say that. We've owned and sold properties in both scenarios and paid the required CGT each time.
Digian, you're in a great place to start. A couple of thoughts for you to look at. 1. First home owners grant, etc. mean you need to live in the place for I think six months before you can turn into IP. 2. There are some great areas in regional mining areas where you can find IP that will pay for themselves and put money back in your pocket if you put in the footwork to find them.
Good luck and speak to some professionals (i.e. good accountants who are into property investing) first.
Mick
We scored 1129 but need to do much more yet. The foundation is set, we've enrolled for RESULTS, watch this space!
