Vendor may have problems getting tenants out in time for settlement and wants to push that on to any purchaser.

FXD

Sounds like you mean lease doc loans.

A non recourse loan is one where the lender will only take the security property but not chase the purchaser for any shortfall on sale. These exist but are rare.

The lender will take the existing rent and you income into account when getting the $76k loan. They won’t take into account rent from a proposed purchase unless this is happening at the same time – and then they will take the debt into account as well.

I don’t do commercial loans so am not up to date, are non-recourse loans even available?

A lender, when applying for further borrowings, will assess you on your income, the rent from the property and the debt you have for this and other loans – with buffers on top.

Perpetual borrowing ability won’t exist as you will either run out of income or…[Read more]

To work out how much extra you could possibly borrow use this formula

(Valuation x LVR) – (existing loan)

So if the value is $1.092 and the existing loan is $634K you could borrow an extra $76K at 65% LVR
($1.092 x 65%) – $634k

But you will still have to pass other hurdles such as the valuation coming in and serviceability.

Its pretty straight forward. Have a look at the examples.
Consider example 3 – it may be a way to reduce tax.

Thanks Benny

I am a lawyer specialising in trusts – if you have any questions ask away

You might have to try an accommodation bond loan in that case.

Another option is for a family member to borrow and onlend to MIL under a formal loan agreement. Loan can be paid out from the estate (if MIL dies first).

You should get a separate loan. IO if you can redraw from the loan account, if not then a LOC>

If you top up you will have a mixed purpose loan.

CGT probably won’t apply.

Assuming it does,

get a valuer in and work out what each block is worth. This should give you a % which u can use to apportion the original price and costs. Any specific costs to each block should be taken into account for the cost base for that block.

You cannot cut in in half because one block has a house.

Thanks Jamie, but not my area of practice. I suggest you try RPI from the forum as he is a property lawyer based in Brisbane.

I am a tax lawyer in the CBD and provide advice on structures/

I recall the words “income without having to work”…

Non owners cannot go on loans – they can, but no bank will allow it.

Your best option is a reverse mortgage – not sure why you think it not applicable.

Another option is to transfer part of the ownership – but stamp duty, CGT and other consequences.

Your MIL needs some good legal advice on the consequences.

I’ve written hundreds of posts on trusts. There is also thousands of pages of good information out there – written by lawyers. Keep in mind there is also thousands of pages of misinformation out there.

See a lawyer for advice before setting up.

Make sure you seek legal advice.

You can generally can only amend 2 years worth of tax returns – the last 2 years.

Seek the advice of your tax agent.

You can generally only amend 2 years worth of tax returns – the last 2 years.

Seek the advice of your tax agent.

Brokers cannot provide tax advice – unless they are also tax agents or tax lawyers. but many of them do provide tax advice and get it wrong.