Yes I would think it could be done via a loan type arrangement. I have heard someone (I cant remember his name) from Chan and Naylor talk about equity shifts as an asset protection strategy. They charge an arm and a leg so I am sure there is someone out there who could do it for a more reasonable fee.

What are you trying to achieve? Asset Protection?

Cheers,
Luke

Hi Marty/Others,

In regards to working under an ABN though an agency, how does this effect borrowing ability? For example, I have been employed in engineering for 5 years under a salary arrangement, but am considering taking up a position where I am paid under an ABN through an agency. Would this impact my borrowing ability if I want to purchase another investment property in the next 12 months? Do the banks consider this arrangement as being the same as being employed under a salary?

And taking it a step further, would banks still be willing to lend me money if the arrangement was me working for a relatively large company, employed through an agency and paid through a Pty Ltd structure?

The reason I am asking this is that it might appear that I am self employed and I am thinking the banks might want say 2 years of tax returns for the company structure (or personal ABN tax returns), when in reality it is exactly the same as a salaried position but the method of payment is different. Whether or not banks would lend to me is iomportnat as I dont want to change how I am paid if it means I can't borrow money anymore!!

Cheers,
Luke

Hi Zehra- 6.59% is quite a high interest rate to be paying.

I would think that you should be able to refinance to another bank and pay 5.7% – 5.9% on a variable rate (depending on your loan amount). There are good brokers on this forum that can help you- try Richard Taylor or Jamie M.

Cheers,
Luke

Yes, it is all politics. I am not convinced that the government was actually trying to implement change. I think they were mostly concerned with trying to look like they were looking after the average battler and going after the big greedy banks. And the reason for doing this was so they can win votes.

I thionk the Perth market is one of the best in the country, along with Sydney. The population growth in Perth is the highest out of any capital city, and with lots of mining activity there is quite a bit of money floating around.

However Perth does not have the geographical supply problems that Sydney does so I think that while the inner areas of Perth will do well, the outer areas may not do as well in the medium term. There is supply of new suburbs being developed in close proximity to transport and within a 30 minute or so drive to the city. I think these suburbs will weigh down the appreciation of older established suburbs that are nearby and other outlying suburbs.

Cheers,
Luke

Sounds like you pay it. It is not the tenants fault that there was a water leak as it was due to general wear and tear on the property.

Cheers,
Luke

There is also lots of things to look into with the wide range of sales. g. Dlwich Hill in Sydney has a wide range of sale prices, but the expensive units are art deco units and the cheaper properties are in 1980's brick apartment buildings. No matter how well you renovate a property in this market, you will not be able to sell a unit in a 1980's brick building for as much as one in a art deco building. My opinion- you reallt need to do your due diligence and know the market like the back of your hand.

Cheers,
Luke

Agree with Richard- the banks will make their money one way or another so I dont see how abolishing exit fees will reduce the costs for the consumer. The banks will either charge higher interest rates or just charge up front application fees. I couldnt see anything wrong with the deferred loan establishment fee as it was pretty clear what it was and what it was for, and they told you right at the start how much it would be- it was hardly hidden in fine print.

Unfortunately the banks need to charge exit fees for fixed rates, or else everyone would just fix rates when fixed rates are lower than standard variable rates and then refinance when the variable rates fall. You cant have it both (or all) ways!!

Cheers,
Luke

Hi Eric-it is whose names are on the title that gets the tax treatment and rental income from properties. So if you and your wife each own a 50% share in the properties and the loan is in 100% your name, the rental income and tax deductions get split 50/50 between you and your wife.

You may be able to transfer the ownership of the properties with stamp duty exemption into 100% your name depending on what state you are in, but CGT would need to be paid. And you should also consider the ong term consequences of this i.e. when it comes time to sell, the capital gain would be distributed according to ownership so if you own 100% of the property, you would pay tax on 100% of the capital gain so a short term benefit like getting some extra government assitance might turn into a long term tax problem for you.

I dont know what the rules are for family assistance but surely your income and your wifes income would be added together? It doesnt make sense that someone would be able to get family assistance from the government because they are not employed irrespective of how much their spouse earns. This would mean that someone would be able to claim government assitance even though their husband might earn $1m + per year!!!! I wouldnt think that this loophole exists.

Cheers,
Luke

Better asset protection in trusts and also a better tax structure.

If you held in your own name and you sold, all of the capital gains would be declared on your tax return and you would pay tax based on your marginal rate. But if you held in a discretionary trust you could distribute some to yourself, some to your wife, some to your parents, some to your adult children etc to gain the best tax outcome.

Cost to set up a trust varies but it is in the order of $1500 for an off the shelf trust (but can be more depending on what you want) and about $1000 per year in extra accountants fees to administer the trust and do the tax returns for the trustee and trust.

Cheers,
Luke