The most common and usually most suitable structure is to hold the properties in a discretionary trust witha corporate trustee. You can have the beneficiries named as any future spouse and future children, as well as your mother.

You could also have your cousins, uncle and aunt named as secondary beneficiaries but I would be reluctant to do this at this stage. If you do become super successful and want to share your wealth with these family members then you could name them in future trusts but it is your decision really what you want to do with your money.

There are also clauses that exclude any future ex-spouses of your children, and maybe even ex-spouses of yourself to give added asset protection but whether or not these clauses stand up up in a court if there is a dsipute is another question.

In any event, it is best to see a well qualified and more importantly experienced lawyer and accountant to set up the trust or any entity you use. You could DIY for cheaper but this may end up costing you a bomb if it is not done propertly.

It is probably also an idea to talk to a mortagage broker to make sure you can borrow money to buy the properties using the proposed structure.

Cheers,
Luke

Yep I would call your solicitor quick smart. Just because you do not produce a Section 32 doesnt mean that the contract is void- if you haven't even attempted to get one then that would give you no grounds to try to cancel the sale. Also from the purchasors perspective the settlement date on the contract is correct- it was written in the contract and you signed it so it is done and dusted.

Probably not a good idea to sign your property away without being 100% sure of everything but I suppose there is no point harping on a lesson learned.

Cheers,
Luke

O my, I am glad that you haven't given me advice then!

Putting the money in the offset account would give you more flexibility. You should put the money into an offset account because if you have a situation where you need access to the money (e.g. new car, medical emergency) then you can withdraw the money without any tax implaications. Whereas if you pay it into your loan, the redraw is counted as new borrowings and so you may have issues down the track if your PPOR becomes an investment.

Of course when it comes time to purchase the new IP you can just withdraw the funds from the offset, pay it into your PPOR loan and then set up a loan split and redraw the funds to maximise tax deductions.

Cheers,
Luke

Did you do any research on what you would probably be able top build before you purchased the property?

Cheers,
Luke

Putting money in an offset account will save you money when the time comes when you need a sum of cash for personal expenses. If you pay the money into your investment property loan, you would need to redraw the money from the loan to pay for your new car or new house to live in. Because it is redrawn, this counts as new borrowings. As the money is for private use the interest will not be tax deductable.

E.g. 1) You owe $100k on your investment loan with another $200k sitting available as redraw. You withdraw $200k to buy a house to live in (not an investment) bringing your loan balance back up to $300k. The interest on the original $100k is tax deductable as it is for an investment property but because this is counted as new borrowings, the interest is tax deductable as the purpose of you reborrowing the $200k was not for investment purposes.

E.g. 2) You owe $300k on your investment loan and have $200k in your offset account (same as example 1 but you have paid the extra money into an offset account instead of into the loan). You take $200k out of the offset account to buy your new house to live in. The interest on the entire $300k loan balance remains tax deductable as you have not reborrowed the money for personal use, and the reason why you have this $300k loan is to buy your investment property. This saves you $4200 per year compared to example 1 above, assuming marginal tax rate of 30% and a interest rate of 7%. This really adds up in the long term!!!!

Best to talk to a finance broker like Richard to make sure your structure is correct and to ensure your structrue is correct for all future purchases.

Cheers,
Luke

Also interested in this queston. Although I am not going to do it in Whitehorse Coucil, I have heard stories of people squeezing more units onto a block of land than they should be able to accoriding to council rules by having a draftman who knows the system and produces clever designs.

Or are these stories stretching the truth and coucils generally have sets of rules that can not be bent or broken no matter what?

Cheers,
Luke

Hi Cameron,

I am having a stab in the dark here and do not mean to be rude- the reason why your property has not sold is because you think it is worth more than it is (because it is yours and you have an emotional attachment to it) and not many people will pay more than a fair market price for a property. Maybe it is because of a bad advertisement or presentation but I doubt it.

Cheers,
Luke

Why will you be without electricity? Just get the electricity account transferred to your name for the 4 weeks or so it takes to do the reno and then have the new tenants transfer it into their name when they move in.

Cheers,
Luke