Here’s the thread.

https://www.propertyinvesting.com/forum/topic.asp?TOPIC_ID=5911

Cheers
Mel

The ‘sting’ I believe is that any building depreciation you claim over the term of your ownership, is deducted from your cost base when selling, so you pay CGT on this cost.

Example.

Building cost $100K to build. So you can claim $2500 each year for 40 years.

You bought for $300K and held for 10 years. (I’ll ignore ALL other costs to show example more simply). In the 10 years, you have claimed $25000 in building depreciation.

Now when you sell for $600K, your gain would ‘normally’ be $600K – $300K = $300K right?

Not anymore! Your ‘new’ cost price = $300K – $25K (your depreciation claim) = $275K.

so your Cap Gain = $600K – $275K = $325K. Halve it etc., and pay your CGT.

Really, you’re now being taxed on $12500 extra at your marginal rate, but you had the refunds in your hand starting from as long ago as 10 years, so today’s $$$ that you pay back, are much smaller than the advantage that you recieved by claiming the depreciation anyway.

As has been mentioned previously, you could ‘not’ claim the depreciation to try to avoid this clawback, but the ATO will just treat it as if you claimed it anyway [], so you may as well claim it and use the $$ today.

Cheers
Mel

Jack, obviously you have not read my other posts. I attended Investment Mastery for $15K, I attended Mezzanine Finance for $12K (both with partner), and I was ‘currently’ enrolled as a Gold Affiliate at a cost of $55K. I am still paying for the last two mentioned courses, and didn’t get about $15K of ‘promised’ value, solicitor consultations out of the Affiliate Plus Program.

I have, however, from Henry’s teachings, increased my (and my partners) net equity by approx $800K in the last 2 years.

I reckon I could safely say that I have had more dealings with Henry than you have Jack.

Cheers
Mel

Oh dear, boys and their football![]

Cheers
Mel

Muppet, I think the Kiwis have another win coming up. 45 off 17 with only 3 left, and Pollock has a runner!!

Aussies 0/30 off 6 against Sri Lanka. Long way to go there….

Cheers
Mel

Now the SA require 27 off the last over.

It went as follows: 1 6 2 6 6 (6 required off last ball)

Mills finally got it right – bowled a yorker. Dot ball – Kiwis win (just)

Hey Muppet, the other word I have seen in the punchline is screwed. I don’t think you could put that – in that context in the newsletter either!

Cheers
Mel

Pisces, in this instance I wouldn’t think that cutting the agent out was the intention. Making sure the offer has been submitted is fine, but you as the buyer need to inform the seller that you are only going direct to them as the agent refused. Implicit in this is that you were in fact introduced by the agent, and therefore the commission is still to be paid.

Most of the contracts I have seen specify that even if you were to sell it to your friend, you would still have to pay the agent’s commission in a exclusive agency agreement.

Cheers
Mel

Marc, your accountant sounds like a fool.

Check out http://www.chrisbatten.com.au. I think he’s in Sydney, and is a solicitor. I would get him to set up your trust for you (my solicitor did mine). Then I would call Nick Moustacas http://www.strategicwealthmanagement.com.au and ask him to be your accountant.

If you are uncomfortable with your accountant, or are treated badly (which I think you have been) get out. there are plenty of others around that are equally as good if not better.

Good luck

Cheers
Mel

I hate to say it Montrose, but I’m not even a Mortgage Broker, and upon reading your post I asked myself why they would want to help you with your attitude?

If you’ve spent any time on this site at all you would have seen that they’ve offered so much help that will not ‘directly’ benefit them, and if you had asked your question without your little ‘dig’ you probabaly would have got your answer quite happily, with no ill feeling.

I doubt the ones that post on here regularly need to resort to contacting everybody that mentions finance anyway. I can’t speak for the ones that do just read rather than contribute.

Cheers
Mel

alf,

couple of ways – but both rely on you having the extra cash available anyway

re pay more than required now – as if it were a higher rate (if P&I loan)
put extra per week aside in a special account that will help to cover expenses

Or another option (depending on servicability as always)

Borrow more than you need, and have extra sitting in the offset or LOC that you can draw on to pay increased costs if/when necessary.

Cheers
Mel