Forum Replies Created
No problems about not having a record of the original cost- if you know the approximate ago, size etc you (or your accountant) can make a reasonable approximation of the value and base the deductions on that.
Cheers,
LukeThe best advice anyone could give you (in my opinion) is do not invest for tax reasons. You invest to try to gain financial freedom, or for greater wealth, or to give your ego a boost, or whatever other reason you might have. Saving a few dollars in tax isn't a reason to invest- tax benefits should only be seen as a little bonus that you get along the way. If an investment doesn't look any good before the tax benefits then in reality it isn't a very good investment at all.
Cheers,
LukeI am guessing that this fridge is included as a part of your rental property!!
You need to confirm with your accountant (I am not qualified to give advice- insert disclaimer here) but I believe this is how it works:
- Your old fridge would have a paper value (say $400). The old fridge is now not fit for use and so is now worthless (worth $0). Hence, you put the old fridge on the tip and claim the $400 loss as a one off deduction on your current years tax return.
- Your new fridge can be depreciated over time over whatever life the ATO has decided applies to fridges (or whatever life span you can justify to the ATO).
cheers,
LukeI remember something Steve McKnight said at one of his seminars- if your house is not selling (and assuming your have done a reasonable marketing campaign), then the only reason is that the asking price is too high. I see houses sitting on the market for months and months and the only reason is that is it priced at $50k too much. Have you had the house valued by an independent valuer (not a real estate agent wanting to sell your property for you) to check that your asking price is reasonable??
Cheers,
LukeYou do not necessarily need a DA for a granny flat. Under the new housing affordability scheme most granny flats can be built/approved under a complying development. A DA is only needed under special circumstances- just drop in to your local council and have a chat with the town planer, they are usually pretty helpful.
cheers,
LukeI agree with IP freely, you should see your accountant. By using the margin scheme you should end up paying a lot less than $250k in GST.
Of course you have to pay capital gains, you have made a capital gain!! I am not sure of the ins and outs of the GST issue, but I believe that you always have to pay GST when creating new titles.
Did you purchase the block in your own name or in a trust? And are you going to make any profit after paying capital gains tax and GST? I would be interested to know how you go.
Cheers,
LukeCheers guys, your suggestions are appreciated. I was not considering moving, but it is always good to get another opinion.
Luke.
You could look at purchasing them in unit trusts as you will then be able to transfer the units into a SMSF to enjoy the tax benefits. No real need to pay down the loans as long as the rent is covering the interest and you have enough surplus to live off IMO. Over time, the value of the loan with respect to the rental income should decrease, and so you will be able to pay them off eventually if that is what you wish.
Cheers,
LukeTotal borrowing is $335k and value of property is $380k.
Cheers,
LukeSorry Michae, 7.11% is for the loan. The LOC is at 7.41%.
Cheers,
LukeRunway wrote:Hi Richard,Basically, I'm after an IO loan that has an offset account and which allows me to refinance my current PPOR so that I can access the equity (using a maximum 90% LVR). Of course, it also has to have the lowest rate available and minimum ongoing fees.
Runaway- trying to get the discussion back on track!! I have a loan with CBA for my PPOR, I have an ok rate (7.11%), although I do pay a $350 annual fee which makes the effective rate about 7.15- 7.2%. Not the best rate out there I know, I would like to know what Richard, Michael or Jamie have to say about that.
But what I have found good about CBA is it is so easy to refinance with them. Being able to access my equity is more important for me than a slightly lower rate. I refinanced with a LOC to bring the total LVR to 90% a few months ago and there were no real problems.
Cheers,
LukeI have looked at DHA investments, however in my view they offered very low yields and not great prospects for capital gains (although my crystal ball may not have been working well at that time). They appear to be very 'safe' investments and so perfect for people who are risk adverse. However, due to their nature, there seemed to be very limited scope for purchasing under market value or value adding via extensions, major renovations or develpments.
Interested to know what other people think though.
Cheers,
LukeYou will pay stamp duty on the sale price or market value, whichever is higher. This rule is in place to stop people transferring property for $1 for tax evasion reasons.
To cut a long story short, if you sell her your share for $1, then you will pay stamp duty on the market value.
Cheers,
LukePropertybee, without being rude it is time that you talked to a solicitor. You probably should have done this before signing anything. Posting on these forums will not solve your problem, I think you need to go and pay for quality advice in order to get this mess sorted out.
Cheers,
LukeLamp,
You sound very confused. I suggest you call Jamie to help you wort it out.
Cheers,
LukeIt sounds like they want to cross your loans which is not ideal. A better option for most people is to use the LOC as suggested earlier.
Cheers,
LukeTerry has a good point. Gifting Money to a DT can ruin any asset protection. You should pay for advice on this one.
You may be able to set it up as a loan (say a 10 or 20 year loan) with the interest capitalised and then repaid in full at the end of the loan term. This will save you from having to pay annual interest to yourself. If the property increases in value, you can refinance with a bank and use a LOC to pay back the personal loan to you.
Cheers,
LukeKent Cliffe wrote:
Excuse the pun but similar to sub prime loans, these properties have been intended for sub prime tenants. NOW, I’m going to get lots of abuse for that statement. But similar to sub prime loans not all of the loans went BAD. A small proportion of them, and this dragged the entire assets security down with it.I disagree. Subprime loans were for subprime borrowers- being an NRAS property has nothing to do with the borrowers capability to repay the debt. I dont think this is a valid comparison. The tenants may or may not be bad tenants, but as the landlord you can approve who is or isnt able to live there so with enough luck (actually, investment skill), you can weed out the poor tenants. You may still end up with a dud tenant, but you might get that anyway with a regular investment property.
Of course you need to do your sums to see whether it is a viable investment. In my opinion, a NRAS property would be fantastic if you were able to be the developer. Unfortunately, some developers are making money off NRAS by getting the NRAS approval for the development, building the property, and then charging you a premium because you can then get the free money from the governnment. If you could be the person to build the units and get the NRAS funding, and then keep them all as cash flow positive properties yourself then you could be on a winner.
Buying them from a developer would work if you purchase it at market value, but I think most developers are marketing NRAS properties as ways to get free money and so are charging more than market value for them.
Cheers,
Luke
Is the trust a unit trust or discretionary trust?
Cheers,
Luke
