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That is a large sum of money. You should consider some asset protection and tax strategies.
Also the offset account is worth having, especially on the PPOR.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Generally best to avoid mortgage managers. They are just rebadging other peoples products and all loans are usually subject to LMI regardless of LVR. This can severely hinder your borrowing goals. Also they often go out of business and it can be very hard finding someone to speak to after that. eg. a client of mine sold a property, i couldn't contact then to organise a discharge of mortgage. this nearly delayed settlement.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Thats a large weekly shortfall.
Will be interesting to see how this pans out.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Sounds very suss.
Get a property valued at $390,000 and put it on the web for $490,000 then give a 'discount'.
Is the uncle using other property as additional security? If so then he may not realise if the valuation comes in low.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
mjb1023 wrote:No, is this forums only for Australia?No, but I was just wondering which country it is in as you didn’t specify.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
is Pennsylvania in Australia?
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
S32 only applies in VIC.
Yes. You will need a valid contract of sale at the time of the option. You need to know what you are agreeing to when the time comes to exercise.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Just looked it up in a map.
Man, be careful.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Only lawyers can give legal advice.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
95% loans are hard enough under normal circumstances. I would say it is unlikely you would be approved if you borrow the deposit.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
You forgot to mention lawyers – A trust is nothing but a bunch of legal obligations.
Seems like you are only considering income tax. What about land tax, asset protection, estate planning, succession issues etc.
Trusts generally do not pay tax, but the money flows through to one or more beneficiaries who then pay tax on this income. You could use a company as a beneficiary to cap the tax at 30%. But there are many other things to consider, some financial, some legal, and some strategies.
I would be surprised that something off the plan will put so much money into your pocket on 100% borrowings or even 95%.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Yes, this is relatively simple. Just a written loan agreement should do. Doesn’t have to be at a commercial rate, could be nil interest.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Achawk wrote:Thanks RichardSorry let me clarify.
Parents will purchase an investment property in their name (they can definitely service the loan themselves) myself and my partner will live in that home and pay 'rent'.
When the house sells the parents will hand over 70% of the profits for us to use as a deposit for our own house.
Basically I want to know what the best option is for parents to help their children enter the property market.
The trouble with this is
1. The parents would pay CGT on any increase.
2. You have not used your CGT main residence exemption. If property was in your name it could be CGT exempt.
3. Parents could change mind
4. Parents could go bankrupt
5. You could divorce
etc
etcWhat if you just borrowed a deposit from the parents?
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Most banks allow offset loans for trusts.
If you pay down the loan there will be tax consequences if you redraw.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
http://www.houseofwealth.com.au
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Cattleya wrote:Terry,Interesting post there. Would be interested to know your reasons / thoughts.
I usually pay principal as well. This is because, at the end of my 25 mortgage I will be… well in my 60s or 70s (hate to give out my age.. lol).
So if by then my mortgage is not paid off, presumably no body is going to give me homeloan anymore because my work / productive time is but over.
In that case then I have to sell the house and hopefully the proceed is enough to pay off the loan and buy something else.The problems with that are:
1. I may like my house too much to move out. Or for some other personal reasons, don’t want to move out.
2. Given the share market spectacular crash in 2007 / 2008, it is not impossible that property market also crashes. And given the recent development in finance industry, any thing can happen. Raiding on saving accounts in Cyprus is not illegal, ECB and Bank of England both contemplating negative interest rate … meaning people have to pay the banks for keeping their money in there..??? Ridiculous… but not impossible.
3. Even if property market does not crash, inflation may eat up most of my capital such that there is simply not enough to pay off existing loan and buy another house.Hence I always pay interest + principal. Look fwd to your wisdom.
Thanks
CattsHi Catts,
I would make sure the money you would have paid off the principal is parked in an offset account. This has 2 main effects
1. It saves the same amount of interest as if you paid down the loan, and
2. It is better from a tax POV if you need to use that money for private expenses.In your case if you had paid down all of your loans at age 80 and cannot get another loan at that stage you would be stuck with the existing situation at that time.
With my method you would still have a large sum of cash on the offset and could go and and buy another property or 2 (depending on the values compared to the cash at that time).
But, nothing wrong with your method, everyone has their own little techniques.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Under Australian law you cannot have a trust of which you are the trustee on only beneficiary. By definition a trust is A holding property for B. You cannot hold proeprty for yourself. THis would be the case under NZ law too I am sure.
The trust assets would be property of hte marriage and could be taken into account under a separation.
The trustee would purchase the property here as per normal. I am not sure how a lender would view lending to a trustee of a foreign trust as the proper law of the trust would probably be NZ.
It may be worthwhile just setting up a new Australia trust as this may be cheaper than seeking legal and taxation advice and worrying about amending the deed to suite the lenders etc.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Stamp duty on the transfer of land is a capital expense so it can only be claimed against CGT on any sale of an investment prperty.
Stamp duty on a lease would be an income expense and could be claimed if the property is an investment. e.g land in ACT.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Have to be in the same names, but some lenders used to offer accounts in another name, such as a related company. Can't think of any that do now.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Were you absent from that house for more than 6 years?
Look at s 118-192 ITAA 1997 and s 118-145 too and send him the links and ask for a please explan.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
