Probably. An agent is not going to walk about from money that easy.

Is there a cooling off period? A notice period?

Say it is a $540,000 property with $40,000 in stamp duty and costs. You have $200k cash.

Since you are going to rent the property out in the future you would want to borrow 104% of the purchase price. This may be hard to do without other security, but thinking outside the square there are a few strategies.

Imagine if you you could borrow $580,000. After a while you could move out, rent the place and have the interest on the $580,000 loan fully deductible. You will have access to $200,000 cash for your new PPOR.

So how do you do it?

You should seek legal advice about gifting $200,000 to an appropriately set up discretionary trust which you can control. You then borrow 20% deposit from the trust and obtain the other 80% from a major bank. The trust has lent you money so it could take a mortgage over the property after the bank. This will be good asset protection.

In addition, the trust can lend you the money on a, say, 10 year term with an interest rate of zero percent for the 1st 2 years while you are living there – subject to being allowed in the deed, Once you move out and rent the property the interest rate could be then at commercial rates of around 8% or so – speak to your accountant about how much.

By the time you move out hopefully the property would have increased in value. Say the value is $725,000. This would enable you to apply for a loan of $580,000 with a major bank  This new loan could be used to pay out the loan to the trust. Refinancing one loan with out doesn't change deductibility of interest so the interest on the new loan should be deductible in full – if set up right.

Net result is 104% loan. Asset Protection. No extra interest and more tax deductions once you move out.

Just make sure you get proper advice on this as there are many legal and taxation issues to consider.

I am a solicitor and a Chartered Tax Adivsor, but not an accountant – located in Sydney.

Not sure what you mean by that.

If there is borrowings involved then the property must be held under trust until the loan is repaid. the legal owner is the trustee of this custodian trust. The beneficiary owner is the trustee of the SMSF for the SMSF members. So any income will go to the SMSF to be held in trust for the members until they meet a condition of release.

Since a SMSF loan cannot be increased it is worth considering obtaining the highest LVR as possible – generally 80% – and then this can be paid down as required, or extra funds parked in the offset account.

Consider whether you need to be registered as a real estate agent too

Assuming same loans and rates etc there would be no effect in putting it in. The differences will be when you take the money out

Offset = no tax issues

Redraw = New borrowings

Lots of issues with borrowing that much money – what if you or them died? The loan needs to be clearly documented. What if you became insolvent – they could lose their money.

What if you couldn't give it back? What if you purchased for cash and then couldnt get  a loan

etc

I agree – Darryl!

Yes, these sorts of agreements can be drawn up – what state ill you buy in? Approx $2k for a tailored JV agreement.

mortgage free debt free – by the title of that they would want you to pay PI!

IO loans are good as it will save you tax until you can pay off non deductible debt. If you are paying down an investment property then this is money which could have gone to paying off your home loan which is non deductible.