Forum Replies Created
Firstly spot on re tax, its always a mistake to drive your investment i from a tax viewpoint it is only one of the issues to be considered.
Yes negative gearing is called that for a reason that is you create a loss. The taxman helps you reduce that loss by effectively letting you claim it against other income but you are taking the risk that the capital growth of the property will be greater than the loss incurred.
So I guess at you age we can establish that owning your own apartment is a major goal. So I would first explore strategies that got you there sooner.
Consider selling current apartment and using that capital and your inheritance to get you into the apartment you want tpo live in. Okay clearly some problems here but at this stage you are looking at alternatives so don't be to quick to kill them off.
what might be the problems. Capital gains tax ? cash-flow -as you are living in the apartment you can't claim the interet for tax. Consider getting frees to share with you and pay you rent (time honoured strategy).
You have committed to a lifestyle asset not an investment asset now -however you can always borrow against the equity in your own unit when you are able to invest so can work for you that way.
If the style of living you wish to be accustomed too is out of the reach at the moment but your own place to live in is major goal then let that drive your strategies.
anyway I think you get the point figure out the main goal and then let that drive your thinking?
A super fund has very strict rules on what it can buy from its members (that's you in this case). If you breach these rules you can be fined up to 50% of the total capital value of your super fund so be careful.
The simple aswer is no you cannot sell 50% of the property you own to your super fund. On the whole trustees are prohibited from acquiring assets from a "related party". There are a few exceptionbs like publically listed shares. (the ATo has some good guides on therir web sites.
So you can't do it but there may be alternatives if we knew why you want to do it ?
Suggest you be careful and first take a step back and ask yourself where do you want to be in the medium term. If you can define this well then that will help you determine better which of the actions you could take will be better for you. You can always mount an arguament for a range of strategies, the key is to understand there importance to where it is you wish to be.
Questions I would ask you- are you committed to renting for ever?
How old are you and where are you relative to retiremnet (this could open up the option of super and using it to build a property portfolio).
Are you in a secure enough employment position to consider additonal gearing?
