There was an article in the latest API magazine which discussed the relative benefits of buying a PPoR vs IP for first home owners. I found the article really annoying however, as it showed such marginal differences compared to the huge effect stamp duty exemption can have. Stamp duty was mentioned just near the end of the article as needing to be…[Read more]

What I've done is use my PPoR and first four IPs all CC'd as security for a reasonably large LOC. I now keep all new properties stand-alone except for using the LOC for the 25% equity / buying costs required. I find this a good compromise. I'm limited more by my debt servicing capacity rather than my equity, ie my PPoR and four IPs tend to p…[Read more]

I've just finished reading Noel W's new book on saving tax on your investment property, and he's quite adamant that you need to be absent from your property for the six year rule to apply. Noel states that if you get in boarders in the first six months your PPoR instantly converts to an IP and it loses CGT exemption from that date onwards. He…[Read more]

gibbo1 wrote:
Does anyone know when the payments will increase?  Is it from today

This is all I've been able to find so far Gibbo:The first-home buyers scheme will be time limited. All contracts entered into by June 30 next year will be eligible for the new assistance.It implies that any new contracts started as of now will be eligible, but it…[Read more]

jeffreycarig wrote:
The government  is giving a grant for houses. Are apartments considered houses? Subsequently are they eligible for the grant too?

They certainly are eligible Jeffrey; it's a first home owner's grant, not a first house owners grant.

Tysonboss1 wrote:

duckster wrote:
Rule of 70 . Divide 70 by the growth p/a to find out when investment doubles. So 70 / 7% p/a = 10 years but remember the longer the time period the more the average growth will be 7% p/a

I thought it was the rule of 72,…. you divide 72 by the 10% return and it tells you how long it takes to double

It…[Read more]

I agree Erik that our population squeeze and level of industrialisation must equate to more expensive housing now. I just don't see how this increase relative to wages etc can continue indefinitely. Even 1% difference (property growth above inflation) means houses will be twice as expensive in today's dollars in 70 years time. 2% will make tha…[Read more]

ErikH wrote:
Very likely that in the long term property will continue to double every 10 yrs or so. The question is how long the current bearish period will be… Michael Keating states in his blog entry of 24th January 2008: – Australian property prices have averaged 10.4% growth over the last 120 yrs – UK property prices have been recorded…[Read more]

Rav, I just thought I would point out some simple maths. It is possible to increase your net worth if your investment property simply follows inflation. Let's assume that inflation is at 4% and property prices are increasing at 4%pa. You borrowed 80k (interest only) to pay  for an IP worth 100k 17.7 years ago, back in early 1990 . It takes 17…[Read more]

It seems Dixon haven't changed their spots for decades. Just thought I'd mention a Dixon home that was being built in our suburb back in 1986. The owners were so incensed with Dixon's slow progress that they erected a sign near their fence that read something along the lines: CLAYTONS HOME. Dixon were supposed to finish our house months ago; th…[Read more]

Hi Terry, I'm just going off what my accountant has told me:"I have tested the Tax Office on quite a few cases and they seem to be happywith no need for having to move away etc to get the 6 year rule. With thelarge property value increases in recent times I am always cautious as tohow they will try and attack CGT, but they seem to be fairly…[Read more]

That's ok Alex, but remember you can only rent it out for six years with PPoR status, provided you don't have another ppor. You only have to live in for about 1 month to show ppor status. The six months is for the FHBG. You only have to live in it for another month in six years time to reset your ppor status. There's nothing wrong with the sharing…[Read more]

Luke, I'm pretty sure you now have to live in it for six months. Some people may get away with not doing that, but I've heard of some having to pay it back , for not conforming to the six month rule.

Alex, you can claim the FHBG, but it would be best to do all that through your solicitor to make sure it's all done properly. You can also rent out your PPoR while you are living in it, and still keep your CGT free status for six years. It may be better to start living there by yourself for a month to establish it's credentials as your PPoR, but…[Read more]