Forum Replies Created
Thanks Number 8
That is definitly something worth remembering further down the line, depending on retirement ages by then. The property is in the name of the younger of the two of us only born in 64 so falls under the new age requirements the other is ok to retire early and has no super so maybe worth thinking of super splitting further down the track in order to release some super early and leave the investment properties alone to further increase as you say.
Its nice to get advice of seasoned investers like yourself and very appreciated thankyou
Thanks Number 8
Yes that was what we where orininally planning on doing and just letting it and any future ones pass down to our kids (20 and 17 at present). We went to an ATO seminar a few weeks ago and it was suggested to minimise the CGT that if you if you take a yearoff with no income and sell in that same tax year you will reduce your tax on CGT as it will be deemed your main income for that financial year, that way you are not paying the full tax rate on the CGT. So he said it is important that if you know you are going to sell in a particular year to take leave without pay for the full year in order for this to be benificial in reducing your tax obligations.
We know the mining towns can be volitile and planned to take out equity as it grows to reinvest in more property.So how long is the norm for holding on to a property, we had handover for a new build early June and our first tenants moved in last week. The house is in Chinchilla so with all the mines starting to take off there we thought 15years min the best way to go plus by then we will be early 60's and plan to sell in a year with no other income to minimise the CGT tax implications.
Thanks
Thanks Number 8 for your answer. Will make sure we go for diminishing when we visit our accountant nex month.
Wouldn't go near them they are very shady
Mcubed82 wrote:Hi JPS
Just reading this,
can u please give me an idea as to what u paid for the property to get this sort of rent, $400cheers
MelHi,Mcubed82
We bought the land last year along with the house as an all in one package on 2 contracts direct from Suratbasin Homes take a look at their website http://www.suratbasinhomes.com.au and speak to Steve Bradford you can tell him Jean and Paul S from the Sunshine Coast recommended him. He is very good and so is Jay as are all the staff at Suratbasin Homes. For both land and a 4 bed 227sm house we paid just under $370,000 prices have since gone up quite a bit since. There are other builders out there but their houses are not fetching the same rent as the quality is not of the same standard.
They are also selling land in Miles as well as in Chinchilla.
GoodluckJPS25
Yes we are pretty happy with the outcome plus they may sign for a further 6 months after the 12 months are up. The best thing is we know how much we will have coming in for the next 12 months.
Thanks for taking the time to advise us.We have just had confirmation of a 12 month lease being signed. I think this can only reflect the high standards that Surat Basin Homes put in. I would definetly recommend them
Thanks JacM and Kate,
PM phoned just before they have just signed for the full 12 months so very happy with that, Its a good start to our first Investment Property
Thankyou for your Advice
Yes they do but only young a baby and a toddler, he is about to start work for one of the mining company's in Chinchilla so school hols shouldn't be a problem. Asked the property manager about maybe doing 8 months so she is going to ask them and get back to me on it. If not we will settle for the 6 months which will take us to Jan 9th or around about. School hols so may get lucky again if they don't continue on.
Thanks JacM I will be speaking to our property manager soon so yes I will ask her to put that to them 8 months would take us to March 9th or thereabouts sonds good. Also gives the tenant time to settle into a new area and decide if they want to build new or buy
We have just done our handover for our first Investment IP with Steve Bradford from Surat Basin Homes at the beginning of this month. We also have a tenant ready to sign a lease starting in July. Both Steve and Jay were very helpful and proffessional in thier approach to everything. The house was built to a very good standard and are definetly one of the better builders around in the area. I would recomomend them to anybody wishing to build in the Surat Basin. We also have an expression of interest on a block of land in Miles.
Our prospective tenant is will to pay the $400 rent the initially wanted 12 months but possibly going to go for 6 months instead. We are new to this any advice as to weather to stick out for 12 months or except 6 months in the hope that by January things will have started to take off would be very helpful
ThankyouHi Brett,
We have a house about 8 weeks from completion being built for the scheme down here in QLD. We had no trouble getting finance through Heritage Building Society, but we were lucky enough to have plenty of equity in our own home so I am afraid I don't know about lenders Insurance. I do know from others on this site and our builder that others have had problems getting finance mainly because of the terms of the lease. The banks do need to see it so its best to let them know upfront about what you are planning to do. Others on here have mentioned that the NAB have been fine with it so maybe try them, and see what they say.
The lease is the main problem as some banks are looking at what happens if the property is repossessed and the tenant has a long lease in place. That is what our builder told us, even some seasoned investors have been knocked back so check out the Nab and see how you get on with them.
When we applied for ours it was mentioned that we would use the equity in the investment property later on to buy another property, our bank manager didn't have a problem with it. So again just be upfront and ask at the time of getting your loan.Good Luck
Hi Gary,
We had no trouble at all with finance our IP is almost finished, we went through Heritage building society and they have been great. The builders also commented on how prompt they were paying the invoices for each stage of the building process compared to other banks. What we have to decide as we seem to be the only one that has gone through ok out there is to whether or not carry on with NRAS or rent out to the private sector. Going to see what QAHC and Horizon say about that before making a final decision to sign a lease.
Good luck with yours. Let me know how you get on.Hi Gary,
Recieved this the other day not sure if you saw it. We also went out to see the house we are building, its coming along good. Spoke with our builders though and they reckon a lot of investors going for the NRAS are having trouble getting finance and pulling out because of it. We are wieghing up are options as to carry on or rent out to the private market. The house we are building is in Chinchilla so should be in a good position either way.Mr Mike Myers Chief Executive OfficerQueensland Affordable Housing Consortium Ltd. Dear Mike,I am writing on behalf of the Department of Families, Housing, Community Services and Indigenous Affairs to confirm that the Government’s intention is that investors receive their full entitlement to the NRAS Incentive.The Hon Tanya Plibersek MP, Minister for Housing wrote to QAHC on the 24 December 2009 to address the consortium’s concerns related to whether investors are entitled to receive the full value of the NRAS incentive and to address any perceived ambiguity created as a result of the Australian Taxation Office’s ATOID 2009/146, in particular its reference to NEJV and participation in NRAS. The Minister and Treasurer committed to a workable solution through an initial administrative solution and longer term to a legislative fix. As advised in the letter of 13 January 2010 the Department has worked with the ATO to finalise an administrative solution to resolving the tax issues for non-entity joint ventures who may be affected in the 2009/10 financial year. Regulatory and legislative amendments will be introduced in 2010 to effect a permanent fix for future years. An administrative solution has been agreed and is in the process of being implemented and will address the issue where, under current arrangements, certain entities participating as members of joint ventures involving head leasing and sub leasing arrangements may potentially have their NRAS Incentive taxed. The ATO has advised the Department that, depending on the legal form of the certificate, Incentives may be received tax free by the lead agency/approved participant; but they cannot be passed on to other members of the joint venture such as the investor/owner of the dwelling without a potential tax liability being passed onto the investor/owner. When the lead agency passes on the incentive to the dwelling owner, income tax could be applied to the payment. The administrative solution will resolve the issue by issuing tax offset certificates directly to the investors/owners and in a format that will meet the ATO’s requirements to enable the offset to be obtained by the NRAS investor/dwelling owner without tax applying. The lead agency will also receive a consolidated copy of the certificates with dwelling schedules, as is current practice, for their records. The ATO has confirmed that this approach will meet their requirements. This approach is a short term solution to give practical effect to the Scheme’s policy intent that investors receive the full entitlement of the NRAS Incentive. I hope this letter is of assistance in clarifying the approach to the administrative solution and look forward to working with you to ensure the success of this solution. Yours sincerely Susan FinniganBranch ManagerAffordable Housing Branch8/02/2010 Hope this is of help to you in your decision
Also you are negativly geering more for 10 years, as you have 20-25.1% less rent coming in and slightly higher property fee's than the normal investor to offset against interest paid. Which in turns gives you a better tax deduction. Then on top of this you recieve between $80k-$100k over a 10 year period tax free. Less chance of the property being vacant over the 10 year period is also a bonus. All of this is what makes it into a cashflow property.
Those of you who do not seem to know a great deal about NRAS I suggest you read up on it you may be surprised.NRAS no need to worry about the new tax ruling 2009/147 as that is being sorted out as the whole idea of this scheme was to get investors involved to boost housing. This is a letter that I recently recieved:-
Mr Mike Myers Chief Executive OfficerQueensland Affordable Housing Consortium Ltd. Dear Mike,I am writing on behalf of the Department of Families, Housing, Community Services and Indigenous Affairs to confirm that the Government’s intention is that investors receive their full entitlement to the NRAS Incentive.The Hon Tanya Plibersek MP, Minister for Housing wrote to QAHC on the 24 December 2009 to address the consortium’s concerns related to whether investors are entitled to receive the full value of the NRAS incentive and to address any perceived ambiguity created as a result of the Australian Taxation Office’s ATOID 2009/146, in particular its reference to NEJV and participation in NRAS. The Minister and Treasurer committed to a workable solution through an initial administrative solution and longer term to a legislative fix. As advised in the letter of 13 January 2010 the Department has worked with the ATO to finalise an administrative solution to resolving the tax issues for non-entity joint ventures who may be affected in the 2009/10 financial year. Regulatory and legislative amendments will be introduced in 2010 to effect a permanent fix for future years. An administrative solution has been agreed and is in the process of being implemented and will address the issue where, under current arrangements, certain entities participating as members of joint ventures involving head leasing and sub leasing arrangements may potentially have their NRAS Incentive taxed. The ATO has advised the Department that, depending on the legal form of the certificate, Incentives may be received tax free by the lead agency/approved participant; but they cannot be passed on to other members of the joint venture such as the investor/owner of the dwelling without a potential tax liability being passed onto the investor/owner. When the lead agency passes on the incentive to the dwelling owner, income tax could be applied to the payment. The administrative solution will resolve the issue by issuing tax offset certificates directly to the investors/owners and in a format that will meet the ATO’s requirements to enable the offset to be obtained by the NRAS investor/dwelling owner without tax applying. The lead agency will also receive a consolidated copy of the certificates with dwelling schedules, as is current practice, for their records. The ATO has confirmed that this approach will meet their requirements. This approach is a short term solution to give practical effect to the Scheme’s policy intent that investors receive the full entitlement of the NRAS Incentive. I hope this letter is of assistance in clarifying the approach to the administrative solution and look forward to working with you to ensure the success of this solution. Yours sincerely Susan FinniganBranch ManagerAffordable Housing Branch8/02/2010So as you can see the government is working with the ATO to fix the problems that have arisen.
The tax incentive started off as $6000 fed government and $2000 state indexed linked at the moment it is just above $8600. This amount is in your hand untaxed and will not be taxed so is actually worth a lot more depending on your tax rate. It is obvious that a lot of the reply's on this subject are by people who have not looked in detail as to what the government is trying to achieve. These properties are to a high standard and have to fit certain criteria as to where they are built, such as high need area's. They are meant for single working people earning over $40000 to families earning up to $90k+ . They sign a lease for 1, 3 or 5 years so you have stability. The tax incentive covers the shortfall in rent due to lower returns of between 20-25.1% plus it also covers most if not all of the property fee's this depend on how much the rent is. This is why they are classed as cashflow and secure.
Yes I agree with you Richard but there will be a lot of these properties being built over the next few years so no harm in doing your homework on them now and then putting as much as possible into savings or mortgage to gain the equity needed in the near future. Some sites to look at are:-
http://www.nrasscheme.com.au/?gclid=CLTDtNjv2J8CFUwwpAodlVuBGA
http://www.housing.nsw.gov.au/Centre+For+Affordable+Housing/NRAS/
http://www.chfa.com.au/NRAS/
http://www.qahc.asn.au/modules/tinyd0/index.php?id=34We are new to it too, not sure how you will go about equity but have a look at the NRAS scheme, it is for 10 years and is a cashflow investment which may help you get your 100% loan. There are a few problems with the tax offset as to who gets it but it is being sorted out between the government and the ATO so shouldn't be an issue. Have a look at it and see what you think yourself.
Thanks I gathered that already no intention of buying anything through them, more just using them to gain more information. We are in the process of building our first investment house under the NRAS scheme, just thought that if either of them are good may be worth going to. Picking up a few tips using this site though its good to use as you have all been there done that so great for us first timers. Thanks very much for your advise its appreciated.
