As mentioned to you in our email correspondance without knowing how much actual cash you have to put in the equasion it is a difficult question to answer.

To buy a standard residential property which needs refurbing will require a cash imput of around 6-10% of the purchase price merely to cover the acquisition costs plus the amount required to renovate or reburb the property.

If you can afford $4500 / month then probably a good idea to start a Bank account and in 3 months you should have saved nearly $14,000 between you. That at least will be a start. 

Kenzel

Ok let us try and answer this one for you

Loan balance:  80K
Equity:              20K (i.e. built up via PI loan only – ignoring cap. growth)
Offset:              10K

What I would have suggested if you had been a client of mine and based on the fact that you still intend to buy a new PPOR one day would have been to gear as high as possible from day 1 the loan secured against the current property.

Let us assume that you took out a 95% LVR from the day of settlement against the 100k purchase price and put the extra $15K into the offset account. You may have incurred additional mortgage stamp duty (still charged in the odd State) and also an increased LMI amount. Both of course which are proportionally Tax deductible when the property becomes an IP.

When it comes to the first IP again you would have taken out a 95% or 100% LVR retaining the offset account linked to the PPOR. To avoid cross collateralising the loans you may have to cover the acquisition costs from your deposit sources.

When you move out of the PPOR your deductible interest would be based on the original loan balance less of course the offset amount (if you retained this linked to the loan).

If you buy a 3rd property which you live in then you would switch the offset account to the new PPOR loan and divert all of your rents and other income sources into this account and have the interest on all loans debited from the offset account.

There is no need to have a separate offset account as you want to minimise the interest charged on the PPOR and maximise the interest deductible on any IP.

Most Banks would have absolutely no idea how to structure a loan and usually suggest you cross collateralise them as it offers the Bank more security.

Hope this clarifies the situation a little.

Mick

I did not say you could avoid CGT in fact i making comment on the statement made by WJ Hooker when he stated that if you buy in Trust then you can sell the properties with NO capital gains Tax.

Yes there are lenders out there that lend against the Gross Realisation or end value of the project but at $300-$400K per property the deals douns too small.

Most standard development deals on say 4+ townhouses / units are done on a GR basis.

This day and age these lenders want to see a good asset base (even if they are not taking security against your other assets) / track records and where possible some pre-sales. Interest rates are of course a little higher.

Mez finance is certainly still available albeit at a considerably higher interest rate but a lot more information would be required to ascertain whether the deal would qualify.

If you want shoot me an email with the details of the site and the party involved i can tell you what can be done.

Hi Petros

Regretfully you are uable to transfer an existing residential property into your SMSF.

Stupid thing is you can sell the existing IP and then your SMSF can buy the IP next to yours and gear against it.

You could salary sacrifice on make deductible contributions and use these to support the shortfall.

The SISA rules dont make sense sometimes but they are aimed at providing you with benefits once you reach retirement age.

In you situation have you thought about converting both the IP and PPOR loan to an interest only loan and review both the interest rates to see if you could save some money.

Are you having your salary adjusted at source to aid with the shortfall and have you undertaken a QS report and claiming all your allowable deductions as well as any loan costs etc.

Be suprising how much you can save when the set and structure is correct.

Tanjaa

Will give you his details Wednesday but if you want an excellent property Accountant and are happy to travel to the Northern Gold Coast feel free to call my Accountant who has acted for me for the last 12 years.

His name is Steve Hodgkinson and he is a partner at the Gold Business Group in Southport.

Steve can be contacted on 5532 2855.

Tell him i referred you as most good Accountants are not taking on new clients especially this time of year.

I have passed his details on to many of my clients from the forum and all have only wondeful things to say about him.

Wow Dig

Just be carefull rushing out and buying a PPOR then turning in into an IP as you will only be able to deduct the interest on the loan balance at the time and you wont be able to redraw funds and claim a deduction against the interest.

You really need to ensure that the loan structure is set up correctly to ensure that you can maximise your deductions as well as reduce your interest payable.

At the moment Vic does offer the additional $3K FHOG bonus but this is not to last for ever however you need to weigh up all of the costs both now and in the future before you rush in and buy between the 2 States.

A good mortgage broker will be able to offer you advice on the loan structure and come up with something that will work for you both now and in the future. Remember loan associated costs are deductible once the property becomes an IP over the term of the loan or 5 years which is the lesser so make sure that you keep an accurate not of any expense you incur.

Sorry GOM missed your last post.

Yes a DFT incurs Land Tax in Qld also.

The following link may assist you in understanding more about the ATO audit of HDT's

http://law.ato.gov.au/atolaw/view.htm?DocID=TPA/TA20083/NAT/ATO/00001