Yes. Tax will be payable.

Don’t forget GST too.

Get your mate to apply for a loan with you or to guarantee your loan.

Major advantage is deductibility of interest from a LOC
money from an offset would not be deductible.

Disadantage of a LOC is that it is at call, not good for a developer, so once it is drawn convert it to a IO loan.

If you can use a IO that can be redrawn and paid directly from the loan account then this would be even better.

Deposit is up to your negotiating skills. Usually you will have to pay for the block in full at settlement.

Duty will depend on the state the land is located in.

In NSW it is due 3 months after exchange, but if it is off the plan the duty is not due until 12 months after exchange or on completion (or assignment). But if it is just land with no…[Read more]

Hi Trish

Your solicitor will arrange for the loan to be paid out at settlement unless you instruct otherwise (and have altneratives arranged with the mortgagee).

Yep as Richard says. You won’t be able to settle while there is a mortgage on the property so you will have to arrange the discharge. To discharge the mortgage you will need to repay the loan that it is securing – or to give other security for the loan.

Before you sell just make sure you will be able to borrow again because things have tightened…[Read more]

The definition of a trust is A holding assets for B. Where A and B are the same there will be no trust relationship.

If a tenant sues they will sue the owner of the property – which will be the trustee and if that is you all of your personal assets are at risk. Having a company as trustee can limit liability to the company and trust assets in…[Read more]

Have you sought legal advice on that? Sounds like you are talking ownership structure as well as borrowing structure.

You and your brother as trustees is not a good idea probably – who will be the unit holders?
What protection will this provide and from what?
What are the consequences of owning more than one property in a unit trust? Also run…[Read more]

My strategy with Accessing equity is to use a io loan if it can used toboay directly from the loan account. But if it cant then use a Loc and once drawn convert it to a io loan.

This is more work but avoids the tax risks.

Don’t forget to get your tax advisor to check your loan structure for tax issues.

I agree Richard, but it depends on the bank. If you can pay directly from the loan account you would be better off avoiding the LOC option. If you cannot then you run the risk of losing deductibility of interest by borrowing and parking into a savings account and then paying out.

The Loc is a totally different loan product to a loan with an offset.

They are not the same and should be used in different circumstances.

Most investors would need to use both produxts at the same time.

They would look at the building works and the fixtures and fittings. There will be a value to all existing things such as stoves, hotwater systems etc and this may produce tax savings more than the cost of the report.

Some will tell you upfront if they think it is worth it. try BMT or Depreciator.

Adverse possession claims are pretty rare so there may not be many with direct experience.

Try to search for some cases and see who the lawyers were that were representing the parties

Sounds like you need to get some serious legal advice. But in the mean time look at unit trusts and companies.

HiJosh

The trouble is the transaction costs. The stamp duty etc and then more costs when they cash you out.

Also there are also many legal and tax complications.

With commercial the risks with tenants are higher than with residential so you would want to more carefully consider asset protection. Paying cash can be done, but would be more risky. A way to improve asset protection could be to pay cash indiretly by having a sepapate entity own the property to the entity that owns that cash – with a private…[Read more]

Hi Zen

If you were in the business of property – which would be rare – then you could claim these costs.

Zen again the answer is no. These expenses do not relate to the production of current income

Zen – no.