Thanks guys… I have lookedat TR 97/23

And it maybe that the Window coverings maybe an 'initial repair' as the proprty is not 'suitable for use' for income purposes. 
any thoughts on my logic….

I also had to put a TV antenna in after purchase, I would consider this to, to be an expense as an original repair??

Exerpt from Tax Ruling 97/23 

Initial repairs are of a capital nature and not deductible

125. A repair after acquisition of property is an 'initial repair' if repair was due when the property was acquired, in the sense that there was a need for repair to restore or maintain the property's efficiency of function. In other words, the property was neither in good order when it was acquired nor suitable for use for income purposes in the way intended.

126. The leading Australian case in this area is the High Court decision in the Thomas case. There, Windeyer J held that the costs of repairing a roof, guttering, wall, basement floor and wooden floor and painting a building in the year of income it was acquired was expenditure of a capital nature.

127. His Honour said (at 115 CLR 72; 14 ATD 87):

'Expenditure upon repairs is properly attributable to revenue account when the repairs are for the maintenance of an income-producing capital asset. Maintenance involves the periodic repair of defects that are the result of normal wear and tear in operation. It is an expense of a revenue nature when it is to repair defects arising from the operations of the person who incurs it. But if when a thing is bought for use as a capital asset in the buyer's business it is not in good order and suitable for use in the way intended, the cost of putting it in order suitable for use is part of the cost of its acquisition, not a cost of its maintenance . The decision of the Court of Session in Law Shipping Co. Ltd. v. Inland Revenue Commissioners, [(1923) 12 TC 621] is commonly cited as authority for that proposition. The principle is obvious without the need for any supporting authority.' (emphasis added)

128. His Honour made it clear that it is immaterial whether the taxpayer knew of the defects or whether the purchase price was affected by them. Windeyer J said (at 115 CLR 74; 14 ATD 88):

'It seems to me immaterial that when the taxpayer acquired the building it did not know of some of its defects … . That means only that the cost of obtaining an asset suitable for its purpose was greater than had been expected.'

Nothing, however, the over the top interest rates available (income)  from the lenders rely on the RISK being transferrsed from them to you. But once alreaday have a liability (a CGT to pay from a sale for example) the game changes on its head. ,Simplisticly, average punter has to rely on share market losses to offset share market gains , when clearing good/bad/ugly investments. Property investors don't have that problem in the main.(they only have capital gains to worry about) I don't know the % nor would I speculate, but most would sell for profit, trigering capital gains. Once this happens wouldn't it be nice to have another framework to offset this money which you know is going to leave your domain (to the tax office). The subtle difference is the % rates offered transfer the 'perceived risk' if you didn't have a CGT liability already realised. That is the point, that needs some thought and reflection. Once the light goes on, then it becomes apparent the opportunity.There are products specifically designed to pay you to gamble on having a lose at the benefit of having high % interst return. But if you already have a known mechanism to offset this risk (your CGT payment) then the risk is completely negated….

I'm not sure if I have articulated a credible answer.. research and you may find a suitable strategy

Cheers

Tim

(I have no pearls of wisdom)

Hope this helps,

Thanks Mike,

You can't recommend anyone? My solicitor is charging the upper end.. (which I believe is above the odds) and it has been extremely difficult using internet to find anyone… no-one on this forum has come forward as yet?? Wierd! Cheap lead !!

As for banks , your on the money, I organised an Instalment Warrant through online portal, only to have it knocked back by bank , then when my Solicitor made variations, knocked back 4 times, eventhough he had done a plethora of deeds with the same bank before.  (apparently the bank changed is policy early in the year due to the APRA changes involving financial products) That is why I'm a little nervous about doing it myself.

Ash, From my experience… assuming you had an SMSF setup, similar to Mike's response.

My last property was a $460K apartment, and the costs over and above normal IP costs were :

Setup Bare Trustee $990 (This is the holder /owner of the property till it is sold or paid off)
Set Up Bare Trust $2000+ (Need one of these for each property) Platform for the property to be held in trust for the SMSF
Legals at Bank lookling at Super Deed and Trust Deed $500
Interest Rate  – standard variable 7.25%
LVR 70% (purchase price only, doesn't include Stamp Duty)

Cheers

Tim

(I have no pearls of wisdom)

You are probably 100% correct… common sense says thats what I could do. I am not that brave just in case I stuff it up. SMSF lending is very tricky (so I have found out). The bank asked for original 'bare trust' certified from legal . Admittedly it was the first time, so 2nd time round the same requirement may not be required… I haven't approached them on that front.

I'm not confident in doing it without legal sign off …

Regards

Tim

(I have no pearls of wisdom)

Thanks guys,

Thats the problem, the website has the AIQS and I checked their ABN and they are a registered Tax Agent… so it makes it difficult to know how much risk is involved in using their services. I have emailed them to ascertain how they approach self inspection for my curiousity.

Tim

Hi Kris,

So we have got our terminology right. I intend to set up a New Bare Trust (old Instalmwnt Warrant terminology) but use the Same Trustee Company to hold the property outside my Super fund. Are you suggesting I have to get a new bare trust (which I agree) and another trustee company with ABN. I will get advise, but the bank have given tacit approval at this stage.

Is the bare trust what you are referring to as "custodial trust' or the holding company.

Any info appreciated

Tim

Thanks Kris, excellent info.. helped clear the issue up in my head. I'll check on the land tax issue as I was intending on using the same trust to hold the 2nd property to save money… but this may backfire if what you have suggested has merit

I have tried to avoid headlease agreements with NRAS. There are some good properties using Ethan Model. Avoiding the Head Lease arrangement meant I could treat the transaction as a normal property investment within SMSF. The NAB had no issue, the NRAS Certificate is 'attached' effectively after the sale, so from a finance perspective the bank will lend 70% LVR, which suits me as it makes the property cash positive (after tax) which is fine.

My only concern is what guarentee witll the NRAS certificate be attached to the property upon settlement. The developer has offered a letter to ensure the property has an allocation. But I am buying off the plan , so a lot can happen in 12 months.

Not sure if others have experienced Ethan Model in NRAS purchases.

Regards,

Tim