Forum Replies Created
Dont use the standard form. Get a lawyer (a good commercial property lawyer not a conveyancing one) to do you up one to suit your needs and have the tenant pay the legal costs. They will have standard form precedents they have developed. That what all big landlords do (unless its retail then its against the law in Qld to have tenant pay legal costs -so it is factored into the rent).
If its leased to a retail tenant you must comply with the Retail Shop Leases Act so its a bit more complex.
Rob
Do you have a website or other info re your properties? I havent seen much around for Adelaide.
PS The head lease for QAHC is pretty onerous and I would caution anyone to also get legal advice before they go ahead.
thx
so Sailesh are you saying that you could do a small development like a stand alone duplex and obtain NRAS for it and then keep it and the tax benefits ? I thought you had to partner with a not-for-profit to do this? Also thought that the application process was very complex….
I dont know about constant maintenance-get a building report to make sure its Ok.
In my experience check that the stumps dont have white ants (although they are not too expensive to replace with concrete) and check if the roof or roof beams need replacing. Also I had to rewire the whole house so check the electricals. One bad thing is they cost a lot to paint -inside and out but that is a once every 10 years expense at most. I have seen my old place which has been rented out for last 8 years and the paint job still looks great (done at least 10 years ago) Looks to me like they have done nothing to it at all in that time.
A good thing about timber houses is that they are much cheaper to make alterations too if you need to move plumbing etc as no concrete slab or brick walls. You can even move the whole house!Maybe you could ring the local agents to see what it popular and what the rents are. I know there is a lot of new housing going up around Gladstone region
cheers
I don't know about "better" but I had a 1930s timber home in Brisbane for 10 years which did very well and which I regret selling all the time! After I sold it the values went even higher. My parents 1970s brick house did not do so well. A lot depends on the area, whether its a character Queenslander home and not just a hardiplank highset and so on. "Queenslanders" are generally popular.
Hi Thinktank
this was an issue with head lease structures but has been basically resolved from ATO point of view pending some legislation to fix it.
Its all so new so there have been some teething problems! One thing that still seems to be an issue in the latest from ATO is the reference to husband and wife partnerships not being able to get NRAS tax credit if in a head lease arrangement. Unless they are only referring to a "formal" partnership set up which is not what it says. Anyone who has bought in joint names should clarify this.
thanks Richard
I thought that might be the case-I am dealing with Sydney office and it maybe that they havent come across NRAS much as its not gained much headway here. I assume that you go through Brisbane. If I have anymore trouble I might drop you a line. Also trying to work out how to structure loans, who's name to use , how much, etc etc.
Sooo much to think aboutPS The ATO have now issued a letter to QAHC which confirms that the tax credits will be passed on if it is a head lease situation. Interesting thing it says that this does not apply to trustees of family trusts AND husband and wife partnerships-implies that you may have trouble if a couple buy in both names. I wasn't going to do this but this might cause concern for some.
Cheers
Hi
I have been investigating NRAS properties in South East Queensland. I have struck a problem with the bank (NAB) I know someone else here said they went through NAB. Bank wants to charge me $500 to look at the documents and then they are just as likely to reject it. They do not seem at all keen. Has anyone else struck this? Any suggestions?thanks
R
Hi ArnieS
I agree with what you say except for your comment about the "very rich". The most vulnerable are not actually what I would term very rich. The people I know who have gone bankrupt and/or lost their homes etc have been owners of small to medium businesses who whether through their own fault or not have experienced a business failure.
Be aware that real estate is a very public investment and a quick search will tell someone what you own and make a judgment of whether you are worth suiing.For a lot of people though who have good paying jobs and are PAYE taxpayers in non-contentious industries the asset protection aspect is of minimal value.
MY's accountant may be genuinely trying to save them some money and doing him or herself out of some fees in the process.Also with your last comment -make sure your will has a testamentary discretionary trust in it-this is a by far the best way to income split and make sure your assets go to your kids and grandkids. It is not that complex but it is best if you go to a solicitor who specialises in wills and estates. Has only one big disadvantage-you have to die for it to work.
cheers R
Hi MY
Whether you use a discretionary trust set up or not depends on a lot of factors as you can see from some of the comments here. It really depends on your goals as well as your current position and age. While you have a low income now that may not be forever. To a certain extent if you and your spouse are both on very high salaries a trust is of less value. If only one of you has a high salary and you have some young children (or plan on having them) then the income splitting can work well to justify the added expense.
A lot is said in these forums about asset protection. I have dealt with a lot of people who have lost everything over the years so I am pretty cautious. If you ever go into business for yourself or if this is an ambition of yours then you must set up some kind of asset protection. You need both legal and accounting advice on this but a discretionary trust is part of the likely answer. A small business owner whether operating as a sole trader, partnership or as a director of a company should avoid owning property that may be seized by creditors in the event of business failure. Even if you have the business in a company set up it is difficult for a $2 company to do business without a directors guarantee.
My experience is that not many suppliers or landlords will check the asset position of the director beforehand although the more savvy will check up so often your spouse will be required to give a guarantee too. it is uncommon (but not unheard of) for beneficiaries or shareholders to give guarantees.
If none of this applies to you and the added costs of the company and trust, including loss of tax benefits outweighs the advantage then you might be better off in your own name. Noone here can tell you what is appropriate for your own circumstances.
I do think the accountant's comments about transfer at a later date to be somewhat naiive as stamp duty and transfer costs (including a valuation) are likely to erode or even remove any gain/profit.Good luck
R
