Good news. Considering the penalties in China and the lack of proper legal process I find it amazing that anyone would give it a shot. The penalty is often death without a fair and proper trial.

I do.

Firstly you should consider whether you should pay off a loan or not – many consequences.

If you want to pay off $400k in 5 years then you must pay an average of $80,000 per year off the loan in addition to paying the interest. Based on that salary and rental income this may be a tad difficult. So think of ways to increase your income and decrease your expenses. Maximise the tax benefits by claiming everything possible that you could claim and go for the lowest interest rate possible – with the features you need.

And finally, it is not a race. Home loans are meant to take 30 years to pay off so don’t worry too much

No Australian lender would be willing to lend based on overseas security. It would be a legal nightmare to lodge mortgages in a foreign jurisdiction and even worse to enforce if you stopped repayments.

I think LMI would be payable again because ownership is changing.

s 118-192 ITAA 1997 from memory

Land tax is an additional problem to consider – possible concessions in vic, but not NSW. Stamp duty would be the same whether trust or individual.

Loss of the land tax exemption and the CGT exemption are the major reasons to avoid using a DT. However it may be worthwhile for some people. I have many specialist medical clients, lawyer clients yet none live in a trust owned property – but I have a 'business man' who does.

Depends on the circumstances, but generally you would if it is your intention to rent the property out once it is complete, the precedent case is "Steele"

Depends how you have structured it.

If cross collateralised, the one loan will be secured by 2 properties. so you will need to gain the lenders permission to release the sold property. This generally won’t be a property if you are releasing the investment property secured by your PPOR – usually the release won’t effect the loan on the PPOR.

But imagine you have a PPOR and then use this to borrow 105% for the investment property. You then sell the PPOR. The bank will only release this security if the LVR on the investment property will be an acceptable level, such as 80% lvr. This may mean you need to pay down this investment property loan = not idea because when you go to get your new PPOR you will have less cash which means higher non deductible debt.

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Another way to use equity is to borrow from a LOC on one propertyand then use ‘cash’ for deposit and no cross collateralising.

If you sell either property there is no requirement to pay down loan if either property sold. You would need to discharge the loans on the property securing it, ie the loc on property A, but the remaining loan would not need to be reduced. For tax reasons things may be different – sale of an investment property may mean you cannot keep claiming interest on any loans kept open – depending on the circumstances.

Why should I do it?

How do I do it?

Where do I go to do it?

How long does it take to set up?

If I settle on a property one week from now and I need to change the sale of contract and loan from being in my own name to a trust, can it be done in a week?

1. A trust is a legal arrangement where A holds property for B. You may do this to benefit your family members for years to come, to make it tax effective, estate planning and to make the investment tax effecient.

2. Generally a trust deed is executed and someone called a settlor hands over some sort of property to the trustee and asks them to hold this on trust. Initial property is usually $10 for stamp duty reasons

3. Solicitor

4. 30 seconds – but you need to allow preparation time, thinking time etc

5. Best to do it before you exchange contracts. You will need to redo the loans, consider stamp duty implications, asset protection implications and deposit. Speak to a lawyer quickly as it may still be doable (not a conveyancer!). Also speak to your broker next, or maybe first.