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heya guys this is all good. The builder quoted me 40k for the job and i think i can do it for around 12k. I will keep everyone updated.
The building is in my name. Also for the future are there any issues with the same situation but the loan in a business name (renovate for profit)?
I should add this is in Qld, so the legislation is probably different in other states.
Thanks for your help guys. In regards to the structure of the company what would be a better idea? Our situation would be one of us working as a plumber earning 65k doing such contracting work, to help with the serviceability of the loans. I would work full time on the business until the banks can see that the business itself can service the loans, I have heard most banks need 24 months of financials with some OK with just 12. I understand some of the options available to us in regards to structure of the business, however I am a bit vague with trusts and I thought a company would be a bad idea as we would have to pay 30% company tax then individual tax as well. I have heard of setting up a company and a trust and having the company be the trustee however I need to develop my knowledge of this area, any help would be greatly appreciated.
Thanks.
Thanks for your help so far everyone. Just to give a bit more information about ourselves. He is a plumber doing subcontracting work earning around 65k and I am in the government sector earning 70k. I have 1 house that I bought for 267k valued now at 330k thanks to adding a bathroom and some good renovations. This property could be positively geared, however if I sell it I will have a tad over 100k to work with. I have thought about using the equity but not sure if this is the best option when starting a business up. I would need some cash to pull my weight. The loan is under 1 year and fixed for 3.
In regards to working and running this business at the same time, I am not sure this is the best idea, as when running a business a considerable amount of time wouldneed to be invested and my current job can move me around at short notice for long periods of ttime….. so yes I am not enjoying this job anymore.
As for the setup we are thinking a business partnership as we would like to avoid company tax and individual tax however this area we need more knowledge on and any help in this area would be great. We have looked at the ATO and other websites and understand the difference between each option but practical application is still a tad out there for us.
