Also structured correctly you can get the best of both worlds.

Utilise a 100% offset account you will get an interest reduction each month on your savings as well as greater cash flow.

Cheers

Richard Taylor
Residential & Commercial Finance Broker.
Licensed Financial Planner. Ph: 07 3720 1888
[email protected]
Looking for life cover – We Guarantee to beat any quote you have in writing.

NE

It is amazing how many times we get asked the same question from clients who want to puchase a PPOR only want to live there for a set period of years and then want to move elsewhere whilst retaining their current property.

The way you would structure you loan is exactly as you have suggested an interest only loan with a 100% offset account attached to it. Pour all of your incomes into the offset account and the amount of interest being charged on the home loan reduces.

Then down the track when you decide to move you merely link the offset account to the new home loan and the entire amount of interest charged on the initial PPOR becomes fully tax deductible.

One issue is that you are usually limited to 90/95% LVR at a decent rate of interest so this means when you move out and want to claim the tax deduction you can only claim against the loan amount.

Another way is of course to fund 100% of the original purchase price and get the Bank to take a term deposit account as security meaning that when you move out you can now claim 100% of the loan amount and remove the term deposit as security.

If however you have paid down your home loan and decide to rent it out all is not lost as there ways to ensure that you can still keep the property and claim 100% of the value of the security as a tax deduction.

This is probably a posting in its own right.

Cheers

Richard Taylor
Residential & Commercial Finance Broker.
Licensed Financial Planner. Ph: 07 3720 1888
[email protected]
Looking for life cover – We Guarantee to beat any quote you have in writing.

Strawberry

A block of 4 units maybe considered as a residential loan by a few lenders however you would not get mortgage insurance on such a property so will limited to a 80% lend.

One consideration would be to buy the property in a Unit Trust arrangement with each unit holder owning 2 of the units once the property has been strata titled. This way you would be able to avoid the additional stamp duty payable if you transferred the units from the buying entity to your individual name or Company.

Financing wise as mentioned you would need at least 20% deposit and may also need renovation costs and strata titling costs.
If the loan was done on an end GR basis then the rate would be slightly higher. Doing it this way you always refinance and take the individual loans upto 90/95% once the work was completed.

Cheers

Richard Taylor
Residential & Commercial Finance Broker.
Licensed Financial Planner. Ph: 07 3720 1888
[email protected]
Looking for life cover – We Guarantee to beat any quote you have in writing.

Dave

Without the full knowledge of your own position it is diffcult to advise you accurately but yes i prefer to have the 2 loans on each security total separate and not crossed.

Depending on equity amounts and the LVR this is not always possible but certainly if you wish to go forward with your investing is almost a MUST.

Cheers

Richard Taylor
Residential & Commercial Finance Broker.
Licensed Financial Planner. Ph: 07 3720 1888
[email protected]
Looking for life cover – We Guarantee to beat any quote you have in writing.

Ben

You will go far my boy with the right advice.

Excellent post.

Remember the Trust idea is only if you have substantial equity tied up in a property (usually in your PPOR) and want to release it by making a non tax deductible loan fully tax deductible.

Cheers

Richard Taylor
Residential & Commercial Finance Broker.
Licensed Financial Planner. Ph: 07 3720 1888
[email protected]
Looking for life cover – We Guarantee to beat any quote you have in writing.

Dave

PPOR – Principal place of residence (your own home)

Many of the online companies that you can buy a shelf HDT from do not have any individual clauses inside their Trust Deed and you get the everyday bog standard Deed.

For another $400 you can get a tailored product (sorry not supposed to be pun) prepared by a proper Accountant.

I know what i would choose.

Cheers

Richard Taylor
Residential & Commercial Finance Broker.
Licensed Financial Planner. Ph: 07 3720 1888
[email protected]
Looking for life cover – We Guarantee to beat any quote you have in writing.

Hi Dave

It is a good question you raise and the simple answer is Yes / No.

Many lenders have a real problem especially when it comes to HDT’s however seem more comfortable with a DT.

Thankfully the market is a big place and we can cater for full doc / lodoc and no doc loans to Trusts at extremely competitive rates and packages.

Cheers

Richard Taylor
Residential & Commercial Finance Broker.
Licensed Financial Planner. Ph: 07 3720 1888
[email protected]
Looking for life cover – We Guarantee to beat any quote you have in writing.

Hi Tina

Yes definately think you should check with a local Town Planner.

Not sure exactly where the property is but if it is in Brissie then 20 m frontage is the norm but i have done them with only 10 M sort of thin and narrow.

A TP is the way to go.

Cheers

Richard Taylor
Residential & Commercial Finance Broker.
Licensed Financial Planner. Ph: 07 3720 1888
[email protected]
Looking for life cover – We Guarantee to beat any quote you have in writing.

orica

I am with Simon whatever you do do not rely on Homepath to settle a transaction for you within 4-6 weeks.

Their customer service is a disagrace and trying to get through to them is a nightmare not only pre but also post settlement.

The no frills products that they offer are just that with no frills service either.

Remember in most States if you don’t on the due date then the Vendor has the right to rescind the contract and you would in turn loose any deposit that has been paid.

I can think of a dozen institutions i would approach who would give you a pre-approval and also obtain a valuation for you prior to going to auction and would run off that valuation if your purchase was successfull.

Just think first before you tread that PATH.

Cheers

Richard Taylor
Residential & Commercial Finance Broker.
Licensed Financial Planner. Ph: 07 3720 1888
[email protected]
Looking for life cover – We Guarantee to beat any quote you have in writing.

Hi Ben

Firstly welcome to the forum.

Don’t put yourself down too much you have some good equity in a couple of properties and you income isnt bad at all.

With the equity you have i cannot see too much of a problem in purchasing a home in Qld (And i must admit i dont blame you for wanting to buy in the Sunshine State) for around $300,000.

On disadvantage is of course that if you intend to move over to Qld and the property will be your PPOR then the interest will not be Tax deductible.

There are a couple of ways of getting round this but comes at some cost and would need more information to see whether it would warrant doing so.

With regards to the CGT you would be liable for would need to know:
1) What the original purchase price and approx date of each purchase Contract for each property.
2) How the properties are held i.e Joint Tenants between you and your wife ?

To make further recommendations on your structure I would need to know whether the loans are interest only or P & I and whether the loans are Cross collateralised.

Hear to help.

Cheers

Richard Taylor
Residential & Commercial Finance Broker.
Licensed Financial Planner. Ph: 07 3720 1888
[email protected]
Looking for life cover – We Guarantee to beat any quote you have in writing.