If you have an SMSF you seem to know what you're doing and I'm surprise you hold so much money in cash and no investment (or perhaps you have plenty of shares/gold etc but didn't mention).

If that's the case I suggest you consult an independent professional planner. I'm sure you already know that, there's a lot at stake here and at this age there's not a lot of room for error.

Nonetheless with $500k you can buy 3 positive cash flow properties in Melb/Syd and I guess that'll have some but manageable impact on your current cash flow – you lose the 20k interest but you'll gain some excess rents after paying off the mortgage. Again if I were you, and if I haven't been paying attention to tax planning / property investment, I'll gladly budget 5-10k to consult an independent planner and property adviser (who doesn't broker your loan).

I'm interested to know tho, whether an SMSF structure for $150k  of super has been worth your while? It seems like a small amount to be worth the effort of self managing. Plus if you're holding cash in your super, why indeed bother with SMSF?

very strange… don't really understand. why would the builder care if you sell before/after 20 years?

am I stupid?

5.3% is about average for an apartments in Sydney no?

Consider Japanese rental market – I was told it's virtually non-existent as nobody rent in Japan!

Regardless I think Chatswood and Artarmomn are good growth areas. Too many asians wanna live in Chatswood and it is a sub-economy in it's own. (same goes to Hurstville)

You cannot attain great wealth and be a free man if you refuse to take risk.

Unless of course you win lotto.

Good luck.

p.s. ~7% is more like the NORMAL rate. Current ~5% is an emergency rate.

Hartfam,

These things come at a price. In the past they have been low performance (if perform at all) investments – You prepay some on-going costs (where the deduction comes from), he get a nice commission, and you expose yourself to often high-risk and elaborate financial scheme that designed only to benefit every one in the selling chain but the actual paying buyer. Sometimes they'll also advise you to take out a loan and prepay the interest (more deduction). It smells like this – borrow/invest $100,000, you get $50,000 deduction… bla bla…. mature in 5 years… bla… can't guarantee… bla… but it's a fantastic investment for someone like you who make so much money… bla bla…

In 2005/6 my accountant invite me to a "launch dinner" at Sheraton hotel in order to sell me one of these funds and a few other "agricultural schemes" including Timbercorp (which has since collapsed). I'm not saying funds are not good, nor am I saying they don't deserve commission, but if it feels like it's designed to lure novice investors, be very careful.

After the GFC I hope the landscape gets cleaned up a bit.

Lastly, count your blessing that you're paying bucket loads of tax. I wish I could be doing that. Within immediate term (this FY) obtaining tax deduction should be seen as a bonus in devising a long term investment strategy, and not as the primary aim (if so just donate the money to a charity – that always give some people satisfaction and is a good spiritual investment). That said, if chosen properly, negetive geared properties are often the most sensible way to achieve this. Anything else (such as shares/funds), you probably won't want to borrow too much and borrowing to obtain tax deduction is just downright risky.

Or take more holidays and try to forget about how much tax you pay… AUD is high and a trip overseas costs about 40% less than earlier this year.

What does your husband do that make him that much?

Eventually they can catch up and data-match 100% of the population if they want to. It's only a database query.

May not happen this year, not next year not year after, but could happen on 4th or 5th year… By then you also need to repay the interest.

A lot more incentive to audit people receiving grants in 2008/2009 due to higher payouts. I think.

Guts feeling based on your post is, you'd better see a suitable accountant for this.

But in the absence of further information, I hazard a guess that these would roughly be what you need to do:

1. Get yourself a pty ltd and start running your business thru it. Doesn't matter if it's in both your names or just one of you. Pty Ltd also separates your business affairs from your personal life – it feels great to have one! (I know from experience)

2. For future purchases, either buy it personally or use a trust. (your accountant can advise you)

3. If you only have one or two existing properties, and your business seems low risk (if you've been partnershipping, I guess it would be?), I won't bother transferring them into the new trust (if you going to set up one).

But as I say, definitely see an accountant.

Why do you need to refinance very year if you make your IP interest only? Don't you only need to do it once?

I think selling just cost too much. Assuming $500k properties, the transactions of selling 2 IPs and buy back is likely to cost you in excess of $50k. Is that a worthwhile option? Maybe… but to me it's just too stressful.