Forum Replies Created
Agree. Mind you the people I know who live in that area and work in the city take public transport (train) instead of driving, which is a huge plus for that area.
Kristina, you mention about moving, but also talk about an investment. Which is the property going to be, PPOR or IP? As one would be more emotionally driven than the other.
Cheers
Tom
Yep, an expense is an expense, and it doesn't matter with what funds it's paid with. It's when you try to claim any interest that might be associated with the expense that will need scrutinising.
Cheers
Tom
I don't think you need to move back in before reselling it. As long as it is sold before the 6 year period is up, it will be CGT exempt.
No one said the ATO had to make sense.
Also for the CGT exemption to take place you can't have another PPOR while you are renting your first property otherwise it gets real messy.
Cheers
Tom
From what I recall, deductions can be claimed proportionally according to the floor area that is rented compared to total floor area. Same concept when it comes to CGT. You can't claim full PPOR exemption if you use the property to produce income. Someone else can verify this.
I assume you're asking the last question due to FHOG? If you can prove you're living in the property, I think you can claim the FHOG and rent the other part of your house, though this I'm not 100% sure upon.
Cheers
Tom
As Jamie alluded to, with serviced apartments you need a large deposit to buy as lenders see them as a higher risk than normal residential security.
That means if you are looking at multiple investment properties down the track, you either need a lot of cash or access to equity to purchase.
Personally I think the Docklands is oversaturated with apartments, which doesn't lead to great growth. Greater opportunities elsewhere. You said you were from the outer west, what do you think of Sunshine out that neck of the woods?
Cheers
Tom
A lot of the banks are coming to the fore on fixed rates. Citibank did something similar yesterday with 1, 2 & 3 year fixed at 5.55% with $1000 refinancing and free 60 day rate lock.
However as you can still get variable packages around the 5.9% – 6.0% mark, it still bodes that age old question whether to fix or not for the long term.
Cheers
Tom
Since he is from Victoria, is he able to "sell" the property to his spouse without incurring stamp duty, she takes out the loan for maximum value on the apartment and makes it into an investment, and he just happens to use the excess money for the new PPOR?
Or do I have my wires crossed somewhere?
Cheers
Tom
In regards to the loan itself, should be setup up as interest only and with offset (unless you have a PPOR loan in which case the offset in the linked to that).
As for fixed or variable, personally I don't like fixed for the very reason that life is full of surprises, and you don't know what may happen in the future (which may cause one to break a fixed rate loan incorporating high break costs). Though it is a personal thing.
LMI is deductible over either 5 years or the end of the loan, whichever is shorter.
Cheers
Tom
Hi Goatus,
Unfortunately you don't have much usable equity. While you do have $60K total equity, maximum loan lenders will allow is 90% of property value, not the equity itself.
Loan 1: $300K x 0.9 = $270K – $260K = $10K usable equity
Loan 2: $320K x 0.9 = $288K, already owe $300K, can't access.
Therefore only $10K is usable equity.
Cheers
Tom
As Terry mentioned, you could have definitely structured your loans differently to be more tax effective.
The IP loan should be IO, and the deposit shouldn't have been so high. At worst case if you wanted to put 20% deposit on the IP and didn't want to pay LMI, you should have paid it into the first home loan (assuming it is a PPOR), and then created a sub loan drawing down the 20% deposit for the IP, making it deductible debt.
If your broker knew what you wanted to do earlier on, and you were able to service another IP, he should have advised you to only place 10% deposit on the IP, and then you could have had another 10% for another IP. Is there any reason why you require 20% deposit?
Cheers,
Tom
Interesting that its a sale through a real estate agent, yet is at a value about 40% down from a valuation 2 years. Essendon is at the higher end of the scale, and though the top end of the market has fallen away somewhat, prices in Essendon have not dropped that dramatically.
Cheers,
Tom
An offset isn't exactly like a term deposit where pays you interest, it is an account that saves you interest tax free at the same rate as the home loan account.
More beneficial than a term deposit, thats for sure though.
