Matt- House unencumbered or not makes no difference in tax deduction..

Copy and paste from another post:

Interest is deductible to the extent to which it is incurred in gaining or producing assessable income or in carrying on a business for that purpose and is not of a capital nature ITAA97 s 8-1.

Interest on borrowed moneys may be deductible where the moneys are used to:

1. acquire income-producing assets (eg property for rental, shares for dividends: ID 2003/841)
2. to finance business operations (eg as working capital) or to meet current business expenses (eg overdraft moneys used to pay business outoings like rates, water, management, legal fees etc)

The security given for the borrowed money is totally irrelevant (TD93/13)

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So really the PROPERTY doesn’t determine if it’s tax deductible or not…it’s the purpose of that fund and the “paper trail you create”….so you can use a PPOR to borrow money on a IP and still have it 100% tax deductible under a normal structure + loan…doesn’t need to be trust etc…

Regards
Michael

ummm and he didnt even tell you?

It means what ever you paid him will occur interest as well because it’s “borrowed”

Ohh well learn and live.

Regards
Michael

Yes- because it’s your money to begin with…

Regards
Michael

More hits = desparate ( as Terry mentioned )

MOST ppl once they get their first approval- they normally go with that.

Normally 2 outcomes with active credit file
1. You got rejected by the another banks (something to hide? something we don’t know?)
2. You may have gotten accepted but is shopping around on your own accord – so why waste our time on your file …if your not serious or not certain.

The big 4 banks has a credit scoring system, if your file is to active the system will AUTO reject you.

Regards
Michael

A lot of ppl would tell you to use a trust, as it will give you the flexabililty of shifting the tax position and ownership year by year + protection.

However to keep things simple- you can buy it in both names and have a nominated % ( more for the higher income owner…you)- the slae contract will have this as ” Tenants in Common” – and you will nominate the %… it has to be set up correctly right from the start BEFORE you sign the 10% deposit contract….

See an accountant before you go ahead with any purchase.

Regards
Michael

Simple answer- no you can’t….

You can’t use credit to pay for credit- The credit card company don’t care! but they will chagre you interest on it from day ONE ( it’s not interest free!! as it’s a cash in advance…not a “purchase”) …the bank however will not lend you the money if you used credit to pay for credit + the bank always write out a cheque to the BUILDER for the construction loans ( fund’s controlled)

P.s you could use credit card to pay for another expenses on this PPOR or IP….

Regards
Michael

It sound like your using your own cash for the 10%….
then your applying for a 100% finance from equity release/X-cross etc..

If that’s the case, then No you won’t get your money back as the bank will not subsidize you for your part….they will only finance the purchase directly

Regards
Michael

How delayed are we talking about? 2 month ? 5 years? 10?

Either way, CGT can not be pushed over or delayed it’s not like a stock ( rolling liabilities); you pay CGT within that year you sell…so if it was offloaded on 1st July then you got one full year….

A bit to late for trust; as it’s in your name already and to do a name transfer will occur stamp duty + the same rules applies anyway.

Regards
Michael

HI Bob,

1. Are you contracting? part time? ie what is wrong with your salary….just beawre even though some bank may think your salary is weird and not “normal” when you approach another banks they may be more then happy to accept it! don;t take a NO from 1-2 bank as the answer.

I seen bank’s accept a self employed with 1 day ABN!! that’s right 1 day…

2. Yes you can….but the only way to go about this is either via as a guarantor loan OR as a 2nd applicant (easiest way)

3. Setting up the trust won’t allow you to gain equity, don’t JUST set up a trust because you can…understand how it works first

4. Dont go commercial if you don’t have to… going commercial is a lot easier sometimes becasue they are willing to bend a lot of rules..but the rate will be at least 1.5-2 % more MIN…. + def more set up cost.

5. No lender’s will not consider the potential increase until it happens …HOWEVER if it’s a business then commercial lender will consider.

Regards
Michael

I think your question is how will centerlink find out??
A question i rather not answer….but if your going to go against the rules; you take a risk- you may not get caught today but you will always be looking behind your back till that day comes.

Just note when setting up a trust or any financial account; your name is STAMPED all over it + dated…so if they need to backdate any payment made; they can.

When you open a trust, your still a “guarantor” or a beneficiary of the trust… something you need to declare to centerlink ( there’s a question which ask are you a guarantor of any financial product )

So really in affect you do own the trust, all your doing is creating a 3rd entity which is set up on a different structure for tax reasons..but the ownership still goes back to you.

Rather then trying to BEAT the system… just work WITH the system.

Regards
Michael