Forum Replies Created
If it’s a one off, I would get a solicitor to do it.
If it was going to happen more than once, I would still get the solicitor to do it first – and then for subsequent times just copy their wording etc.
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MelGatsby, how come you want a solicitor?
For a standard refinance, you can just put ‘self’ in the app form where it asks for your solicitor details….
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MelMadhun, I should probably clarify and say that the property you have bought as an IP cannot have been bought before July 2000 when GST came in, but other than that my post is absolutely correct.
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MelWayne, is there any way that you could loan the money to a trust that you set up? At the lowest rate that the tax office will let you get away with?
This way the company will still pay 30% tax on the interest it earns, but instead of you paying an extra 18% on it, it is instead being used to build assets for your family in the trust?
Also, a benefit of trusts is that any company you are a director of (I think, Dale’s book will explain more) can be a beneficiary. So at worst case, you can distribute any income to a company and pay the 30% tax.
Also, with companies and trusts, Dale’s book will give you a nice two page listing of personal expenses that could be paid for by the trust or company pre tax – thus saving a potential whole heap of money.
You are on the right track asking questions, and learning, good luck.
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MelHi lifeX
If you currently have the setup where your company collects rent (as long as that’s all above board – not sure about re licences required etc.) then there shouldn’t be a problem piggy backing your joint venture onto it.
I guess I was thinking more along the lines of you having a PM looking after the place, then depositing the money in your company account, then you transferring the money to the trust. If that’s not the case, then it sounds fine.
I would definitely structure a JV as a unit trust (have just done so for latest purchase).
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MelMarisa, I like the idea of borrowing some extra against the place, and then using that ‘borrowed’ money to cover any shortfall. One solution, not the best, but it would save your out of pocket.
In regards to increasing the rent ($10 per week won’t make much of a dent into your $4K per year!), look objectively at the house, and see if there’s any value add you can provide to the tenants, to see if they would agree to an increase in rent in exchange for – like a pergola or something. (This is assuming you are at or above market rental currently.) This should also add some capital value to your house.
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Melrusty, an instalment contract is actually a contract of sale – so you are definitely buying the house.
A lease option is a lease agreement, whereby you are renting the house, and have an ‘option’ (a right, but not an obligation) to purchase the property at a specified price in a specified timeframe.
The legislation only refers to dwellings in SA, so if you lived in SA, you could quite easily wrap in any other state….
Have a look at the resources or investor strategies pages on this site – I think they’ll have more info for you…
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MelLuke, excellent advice from Simon if you have a PPOR loan. That way you would be turning some non deductible (PPOR debt) into deductible (pergola debt) expenses.
If you don’t have a PPOR loan, it’s up to you how you want to do it!
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MelOriginally posted by Misty1:
Thanx for the suggestions.
Derek,i tried link to find out about book,searched their books & library list,& couldnt find it. (but it is late…[sleepyanim] I’v requested they send me some info.Misty, I clicked on the ‘Shopping’ link on Dale’s website, and it took me to Tax Battles and Trust Magic info straight away[specool]
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MelNewgen, I think it would be two contracts for the purchase (one for each property).
For the financing of your ‘new’ house, you would ask your lender if your loan is portable, and would need to top it up, and transfer the mortgage from your current property to your new property, and you would ‘pay’ the seller the entire $400K on settlement.
I would assume a concurrent settlement, so you would give him $400K, he would give you $300K, and the banks and solicitors would work out all the nitty gritty. You wouldn’t worry about the other guy’s finance – just how yours will work out.
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MelWhat do you mean by Tax Credits? Is it GST related? Or shares related?
Don’t know if this will answer your question, but for FY 02/03 my taxable income was -$107K, so I can carry that forward to FY 03/04 and have to earn $113K before I will pay any tax at all[biggrin]
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MelI was audited in December for seminar expenses only – thank god they didn’t want to know about my property stuff. I would have had all receipts etc., but they asked for a bit of an essay on the seminars…..
In the end I just said, bill me, I couldn’t be bothered with the essay, as my ex had done pretty much the same a couple of months before and lost, and i knew my bill would be about $1000 if that.
I hope I’m not audited again this year……. (although the audit was for FY 01/02, and I’ve only just done tax return of 02/03)
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MelRob, it was my understanding that with the FHOG legislation, you could move into the property later in the year and then claim the FHOG….
darkon, if you buy an IP first, and never live in it, you will still be eligible for the FHOG when you do buy a place to live in. On your income, it doesn’t sound like you really need to rely on the FHOG anyway.
Personally, I think your idea sounds reasonable – a lot of people need the ‘forced’ saving, cos if it builds up in your bank account, there are many ’emergencies’ that seem to come along and help you spend the money.
Property is forgiving, so if you can find a unit for that price that rents well, it’s not a bad start for you.
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MelHiya Rob
Sorry I have not posted, but I have found your calculator very useful – but am also disappointed to see in plain black and white (well, colour really) that I am not actually making any money from the property details i input – oh well, I still like it, and it’s been a good growth one[biggrin]
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MelI’ve made some – and lost some.
I bought some Telstra shares (and hadn’t sold them when they were at $8- d’oh). I wrote about 5 months worth of calls before I got greedy and got called away – which didn’t really bother me as I wasn’t that fussed on holding onto them – but the premiums helped prop up the return on them.
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MelWe had the same problem – but sort of in reverse. They ‘estimated’, and then later on read the meter (supposedly) and added about $100 to the bill. They were going to re read the meter when questioned, and ring me back, but they never did![baaa] Ended up paying it, as I didn’t want a hit on my CRA – was certainly never offered a discount!
Everdine, can you get a reading of the meter now? If it’s been tenanted, you should (maybe) be able to backdate the usage based on history, and try to work it out from there.
You never know – the current reading may still be less than their ‘estimated’ one of months ago!!
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MellifeX, sorry, not quite sure.
On one hand, your company appears that it would be ‘managing’ the properties if it were to collect the rent, but on the other hand, they are your own properties.
Why would you not have the rent deposited directly into the trust bank account?
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MelHa ha[biggrin]
Kids, you gotta love them!
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MelI think Neil just likes to get on the news, or whatever. It appears he will attack anybody who shows any interest in attempting to help other people get ahead in their lives.
Plus, he never seems bothered about letting the facts get in the way of his ‘good’ story[baaa]
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MelFrom other things I have seen/heard about Destiny/Margaret Lomas, it appears that they recommend St George because you can have up to 10 sub accounts. They seem fairly big on cross collateralisation in that sense. From my experience, St George charges $10 per month on every LOC account (including subs) where you do not have direct salary crediting in place.
So, wouldn’t be the best for me…..
Cheers
Mel
