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September 18, 2003 - 2:51 am
Hi James. Yes, you will need to pay stamp duty on the current value of your home when you transfer it. This may or may not be sustantial.
If profits are retained in trust, they will be taxed at 48.5%.
If profits are distributed to the beneficiaries, assuming you’re one of them, you will be taxed at your marginal rate.
If one of the beneficiaries is a P/L then, yes, they will pay only 30% tax on distributed income. In that case you will have one P/L as trustee and another P/L as a beneficiary, along with yourself and whomever else you choose when the deed is written.
Between the stamp duty and two P/Ls, plus the trust deed, you may be up for considrable expenses to put this structure in place. If this cost is not prohibitive to you and the structure is suited to your long term goals, then that’s fine.
Michael
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September 18, 2003 - 1:17 am
Unless you intend occupying the property for a specific period of time, you’ll have to pay CGT. And if this property does draw a CG and you do have to pay a CGT, ain’t you worried the other party won’t just say bad luck, since your the official owner you’ll have to pay this tax ?
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September 17, 2003 - 9:22 am
Hi Andy,
Well I read through all the post in this topic and it sounds like a great idea. I will have to get my wife to sit down with me and we will see if we can do the same.
The only problem I see though is with capital gains out in the country towns as aposed to the gains I am already achieving in Sydney.
Matt[]
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September 17, 2003 - 5:14 am
email me
[email protected]
I’ll talk you thought a couple of ideas.
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September 17, 2003 - 4:53 am
Hi R2, as Milkman says, it’s only the net income or loss that is used to calculate tax. Because we are hopefully getting positive cash flow, then we will have to pay tax on the net postive cash flow.
The 11 second rule on your 70k property implies a rent of $140/wk, not $150. Assuming you’ve used equity in other properties to get your 75k loan, then with an interest rate of 6.5%, your repayments will be $93.75/wk IO, or $115/wk for a 25 year P&I loan. This leaves a profit of $46.25 or $25/wk resp. Out of this must come maintenance, management fees, vacancies etc. Any surplus after that will be taxed at your marginal rate. This profit will be increased in proportion to your initial deposit of course.
Jim.
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September 17, 2003 - 4:49 am
Go out there and do some good Arty. You’re better than them.
I agree with that 100%.
There comes a time when you have to let go, for your own sanity. Why waste a phone call on them, when a phone call to a decent real estate office could be just as profitable.
Show them how much better you are by getting smart and breaking (financially) free!
([] and just between you and me…I think some of these ppl here REALLY know what they are talking about coz they seem awful smart and stuff….so pick their brains and “borrow” some of their advice while they are willing to share it [])
Lots of Luck Arty2003 !
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September 17, 2003 - 4:23 am
quote:
House 1 (positive)
Price $50k*4 = $200k
Cash flow +$5k*4 = $20k
Capital gain 10% = 5k*4 = $20K
Net return = 20k cashflow + 20k CG = $40k
Cheers
Amit

Come on Amit/ Andrew, these figures are sooo out to lunch! You might get 10% gross rental return on a 50k property, ie 5k income, but what about 6.5% loan interest, maintenance, management fees etc. You might end up with $30 per week net, but what about tax? There goes (up to) another $14.55 per week. You said “after tax refunds/payments” Andrew, but you can’t have meant for the CF+ case.
Also the 10% capital gain on a CF+ property is probably on the same lunch break.
Jim

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September 17, 2003 - 4:17 am
the cover of the book is…….*shrugs shoulders* looks a little like Sydney
BUT!!
come on ppl……perth better than melb? Surely you jest!! I will admit WA has some lovely spots…Esperance comes to mind…lovely place and I will honestly say the coppers in perth are lookers!! Wearing them tight pants and carrying handcuffs Mmmmmm…..but I digress!!
Melbourne has soul. Melbourne has heart.
and the best thing about Melbourne?? it has ME!!
[][][][][]
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September 17, 2003 - 3:42 am
THANK YOU!!!!!!!!
I couldnt resist the word FREE and I LOVE presents!!
*adding steves name to my list of people who deserve xmas prsents this year* Thats makes 2 ppl now ……LOL
~ Heaven doesnt want me and Hell is afraid I will take over ~ :þ
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September 16, 2003 - 10:30 am
Hi Andy,
Sounds like you could realy be on your way to big things.
With the cash your house gives you, I would look at buying a block of units.
There was one for sale in Bathurst for $960,000.00. That consists of 12 2 bedroom units. The average rent was $140.00 pw, that would give you an income of $1,680.00 per week.
You could handle that couln’t you?
Matt[]
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September 16, 2003 - 7:51 am
Hi Pinky,
You just descibed my situation (excepting that the male slaves should be replaced by nubile, energetic smiling nymphettes, grateful to be baking in the awe of my prescence !!).
The 11 second thing is the easy bit. Just divide the projected weekly rent by two. Multiply the answer by 1000, and see how close this arrives at the asking price. Negotiate from there. Remember, it’s only a guide. Alternatively, look for projected rent which annually equates to around 10% of the purchase price.
Once you have sorted this out, move on to wraps and options. That’s where it gets tricky, but interesting. Remember the 2nd Golden Rule, “Risk equals Return”.
The first Golden Rule is “He/She who owns the gold .. Rules”. Place yourself in a position of control.
All the best with your ventures .. your mentoring will come about by way of the collective thought directed to and for you. Keep asking questions, as those with knowledge and experience can’t help but to share it, particularly if they see an error to correct.
Kind regards, Phil
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September 16, 2003 - 7:27 am
Quote:
I have answered your criticism to the best of my
ability, using quotes from the tax office booklets that prove my arguments, if im still wrong then im just going on what the booklets say, but i think you hav lost your case… Where are u getting this information from anyway saying that im wrong?? so far u havn’t proven a thing… just told me that im wrong lol perhaps its you who cannot read my friend…..
That is alll!!!!
Jason []
Lisa buys a house after 20 Sep 1985 ((( but ceases to use it as her main residence ))) for the 10 years immediately before she sells it.
. Not she buys a house and on paper says she lived there !
You have proved nothing and show me in your book, where you can buy a property and never lived there and it will be your PPOR ?
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September 16, 2003 - 7:18 am
Im bad? Nooo!! Im innocent…ish. Ok Im a little bad…but in a good way []
Thanx….I like it here…the people are friendly and the advice is good….well thought out and positive (most of the time LOL)
Happy investing to us both
~ Heaven doesnt want me and Hell is afraid I will take over ~ :þ
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September 16, 2003 - 7:05 am
personally…..I find the face to face meetings work much better. Decide where you want to invest and go there…meet a few locals and then have a few drinks with the local real estate ppl. Dont let on that you may be investing..act like you are looking for a family home. (well you are if you rent to a family LOL)
Face to face meeting also allows you to ask questions and guage their answers. Its soooo easy to lie over the telephone or in an email.
As Steve points out in his book….it is better to look like a local then an investor…and you will find people open up more to you if you approach them on their level.
The internet is great…but alot of people have bought property ‘sight unseen’ just to have disappointment. Rely on knowledge and a little gut instinct
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September 16, 2003 - 7:04 am
Quote:
To auspiciousdna; (again)
Isn’t having a place VACANT for 3-4 years whilst still using it as ur main residence meaning that ur living there, but unoficially??? as in “just on paper”???
And, may i ask who has knocked on your front door recently to confirm that you are there???
Its just a matter of how u read the rules and interpret them… in the example given the person rented for 6y and had it empty for 4 years, then sold. Where was her time to actually “live” there?
But it was still her primary residence, as the example said…
pg 53 of the same booklet also states that there is NO MINIMUM time in which a person has to live in a dwelling to make it their main residence…
call em if u like, u know the number…
Jason
You still haven’t answered me why, she didn’t just say on paper she was still living there if that’s ok ? And just because no one checks doesn’t mean it’s ok or legal !
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September 16, 2003 - 6:53 am
LOL no I am not his ex…but anyone with good fashion sense NEVER forgets a pink helicopter!!
Bottoms up! [][][]
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September 16, 2003 - 6:32 am
Quote:
To auspiciousdna;
How certain are you of this??? If someone pointed out to me that I was incorrect and I found this to be true, then I would have retracted my statement and apologised… Calling my comments illegal, and being an “advertisment on how to break the law” is just going way too far in my opinion… unless you are an accountant or a Lawyer (are you??)……..
Ok, now this is what I found in the most recent Booklet from the ATO….
One period of absence of 10 years
Home ceases to be the main residence and is used to produce income for one period of six years.
Lisa buys a house after 20 Sep 1985 but ceases to use it as her main residence for the 10 years immediately before she sells it. During this period she rents it out for six years and leaves it vacant for four years.
Lisa chooses to treat the dwelling as her main residence for the period after she ceased living in it, so any capital gain or capital loss she makes on the sale is DISREGARDED. The maximum period the dwelling can continue to be her main residence while it is used to produced income is six years. However while the house is vacant, the period is unlimited, which meant the exemption applies for the whole 10 years.
In addition to this, because the dwelling is fully exempt as a result of Lisa making this choice, the ‘home first used to produce income’ rule (explained on page 56) does not apply.
Home used to produce income for more than one period totalling six years
In the 10-year period after Lisa stopped living in the dwelling she rents it out for 3 years, leaves it vacant for 2 years, rents it out for the next 3 years, then once more leaves it vacant for 2 years.
If she chooses to treat the dwelling as her main residence for the period after she ceased living in it, any capital gain or capital loss she makes on selling it again is DESREGARDED. This is because the period the home was used to produce income during each absence is not more then 6 years.
Pg 59, Guide to CGT, 2002-2003
Well??? what do u think of that??? it does sorta reflect what i was saying doesnt it???
As i also stated in my first response “I may be wrong” Im just human, but please, in future perhaps you should use a different aproach when you ‘believe’ that someone is incorrect!!!!!!!!!!!
Jason….
Did you write this
> what you do is buy an investment vacant, and “move in” either officially or just on paper (((((( or just on paper ))))))) ? saying you live somewhere when you don’t, to gain an tax advantage is illegal, like it or not !!!!!!!!!
In the 10-year period after Lisa stopped living in the dwelling
> Why didn’t Lisa just on paper say is was still living there, if that can be done ? Can you answer that ?
If you can prove me wrong I’ll apologies ! P. S. I say maybe illegal, if you can read.
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September 16, 2003 - 6:27 am
Hi Lawry
I’m a management consultant working in the electricity industry ie we work for companies such as AGL, Origin, TXU…
Also studying the Chartered Financial Analyst Programme to hopefully one day get into investment banking.
Regards
Chris
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September 16, 2003 - 6:18 am
edelstein (sp)
I drink white…. []
~ Heaven doesnt want me and Hell is afraid I will take over ~ :þ
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September 16, 2003 - 6:17 am
Is this like Bat Girl vs The Joker, or something?
Just remember that:
Steve McKnight can turn 10 property investors into millionaire in 12 months
and
[HK] will turn 5 property investors into millionaire in just 6 months and 1000 property investors into millionaire in 12 months
is not quite correct, or am I mistaken in thinking that (for example) “controlling” $1M of property with $800K of debt makes one a millionaire?
Wouldn’t the “millionaire” tag assume net worth, not total asset value and, hey, let’s forget about the money we owe [] when we work this one out.
I saw Steve on Today Tonight and he qualified the statement by saying “controlling $1M worth of properties in 12 months” or similar, so that’s fine, I suppose.
Henry does the same with the small print “Property Millionaire” means someone who has secured $1million of property.
Perhaps the people involved should be $200K-aires and not $1M-aires.
Anyway, Henry is probably trying to stir up Neil Jenman, among others, but as Neil says, “Henry, just go away.”
However, if both Steve’s and Henry’s goal is to make xx people CONTROL $xx of property, I’m sure they will both succeed. As for millionaires, well…
Michael