Hi Thomas

Welcome to the forum and i hope you enjoy your tme with us.

I am with Eddie i think you would be unwise to consider a Hybrid Trust in the current climate as away from the Tax issues finding a lender who likes them at a competitive rate and product is another issue.

Before you start out on Trust structures personally I would be looking to get your finances in order on your existng PPOR to make sure that your investments are all set up correctly.

Drop me an email and I would be happy to direct you accordingly. 

CBA do not offer a fully transactional offset account so personally would not use them.

Either Anz, NAB or Westpac offer a fully 100%  transactional account but i guess we all have our preference on lender due to the  level of customer service.

Each has their own pecularity so just need to be make sure they meet your needs.

Why not look at buying a propery as your PPOR and receive the benefit of the FHOG.

Not sure which State you are in but that could be circa $17K for a 2nd hand property.
Make the loan interest only with a 100% offset and put down the minimum of deposit.

As long as the services are in your name and the property is not offered for rent the property could stand vacant for the first 6 months whilst you renovate it and if defined as you PPOR you will have satisfied the FHOG requirements.

After 6 months you look to rent the property out as an investment property.

Secondly you look to buy a separate property as an IP and lok to prepay the interest on the loan for a year upfront.  You use the FHOG as your deposit or funds to cover the interest.

This will give you the years interest as a deduction in this year and then come next Tax year you can decide whether you repeat the exercise or change them both to paying interest monthly. 

Sydney,

With the limited information to hand and subject to having satisfactory previous employment history you should be fine.

Although as mentioned earlier you can do better in respect of interest and fees.

One consideration in whatever you decide will be the flexibility of the loan and the structure of the lending.

Remember what starts out as a PPOR so you can claim the FHOG and Stamp Duty concessions could end up being an IP and you both want to move on to bigger and better things in the way of a new home.

To many clients i have seen over the years put down a big deposit, utilise their FHOG, get sold some redraw feature on their loan product by their Bank manager and then a year later decide to rent out the house or unit and move to somewhere bigger as their  PPOR. They realise that they need to access the equity in the first home and look to redraw the amount already repaid.

Shock horrow when they discover that the amount repaid of the original principal cannot be claimed as a Tax deduction even though it is secured against their IP.

They realise that the priceless information their Bank manager gave them  was actually incorrect although had the loan been structured correctly they could have had the best of both worlds.

Interest savings as well as protecting the full deductability of the loan interest.

It isnt rocket science but after the loan has been established and set up it is too late to change and protect the deductability of the interest.

Make sure you deal with a mortgage broker who has some experience in investment structures rather one than merely processing loans for First Home Buyers.

As Terry has mentioned withoout a deposit you wont get past first base.

100% oans are stil available for IPs but you wouldnt qualify and couldnt come up with the Stap Duty and other assocated costs.

Dont feel too bad as I am in the UK for the next 10 days and here the maximum LVR avaiable is 85%. A couple of lenders were offering 90% LVR but they withdrew early in the week.

Makes it hard when you are tring to seek a new loan.

Unless your MIL can lend you funds to cover the deposit you will not qualify. 

NSL What you would do is sell the unencumbered house to a Unit Trust with both of you as Unit Holders.

You would borrow 100% of the value of the home and pay your Stamp duty based on the Transfer value.

Of course as you owe nothing on the house the net realised proceeds are yours to use as deposit on the new PPOR.

What you are trying to do is shift the debt burden from non deductible to deductible and then be able to claim the interest on the full amount as the purpose of the new loan was to purchase a new IP in the name of the Unit Trust.

Don’t want to disagree with you but makes no difference who you now at SGB,

There 100% lending is done by their Specialised Mortgage Services and the documentation requirements are standard due to the fact that the loans are not mortgage insured and securitised but kept by the Bank on their balance sheet.

Before starting my own business here in Oz in 1994 I was SGB regional lending manager and I assure you I can’t slip deals throught without all required documentation.

There are better products out there as the Dragon is not the easiest to deal with.

CGT is only payable once the property is sold.

If the 3 of you own the property develop it into 3 separate titles and hold all 3 in all 3 names then there will be no CGT payable.

Anything different add it in as an expense.

Not as easy to make a profit as it sounds. Lot easier ways to generate both income and capital.

Darren

Regretfully it cannot be done the way you intend.

Only way to get around it would be for a 4th party (parent for example) to buy the original property and then develop it and sell the 3 of you the individual land parcel or townhouses after it has been developed.

You would need to cover their GST and potental Capital Gains Tax.

All in all not worth it as will cheaper for the 3 of you to go and buy and individual Townhouse as your PPOR and leave this project to be done as an investment deal.