Cancel the contract – then read it – and make a new offer after getting advice from your solicitor.

Why are you doing this?

You should not use a conveyancer as your need additional legal advice in relation to estate planning, taxation, equity, family law and insolvency, stamp duty.

In Vic it can be done with nominal stamp duty, but if it is being done for investment purposes any interest will only be deductible if one spouse borrows to buy the other spouse at full market value.

Items of a capital nature could only be depreciated rather than claimed outright. that is a portion of the cost claimed each year for x years.

You should only hand over money on the production of a tax invoice – from the person you pay.

As long as you made no representations it will be difficult for them to get anywhere. Of course they could still sue you, but this doesn't mean it will go anywhere.

CGT may not apply as your intention is to sell at a profit.

Unit trusts can only distribute income in accordance with the deed which will be a fixed percentage based on unit holdings. Maybe look into discretionary trusts.

That is good news. It means it is not a mixed loan and can be paid off independently.

If you don’t use this as deposit do you have cash to use?

Kat, does the $90k loan have its own loan number separate to the $280K?

You could possibly claim only a max of 75% of the interest on this mixed loan if it became and IP. Other expenses could be claimed in full.

This is more complicated than you think because of that $90k mistake.

The loan is currently $280k (rounding to make it easier). Of this $90k relates to the extra repayment. So your loan must have been around

$280,000 before you withdraw the $90k

$370,000 after you withdraw the $90k

and

$280,00 now that you have redeposited the $90k.

The $90k is considered a separate loan as it was borrowed separately from the original money.

Now once you withdrew the $90k you had a mixed loan:

$280,000 associated with the purchase of the house and

$90,000 associated with a savings offset account.

total loan $370,000 $76% of the interest of this loan is associated with the first loan and 24% the second loan.

Now you have gone and deposited $90k. Since you have a mixed loan – ie two loans within one you cannot say the $90k deposit must come off the $90k loan. Any deposit must come off both loans in proportion to the %. So 76% of the $90k deposit must come off the $280,000 portion. 76% is $68,400. So your new mixed loan balance would be like this:

Total loan $280,000

Loan associated with the purchase of the property = $211,600

Loan associated with the money borrowed to fund an offset account = $90,000 – (24% of $90,000) = $68,400

Therefore only part of the loan is associated with the purchase of the property and this part is $211,600/$280,000 = 75.5%

ie only 75% of the interest on this loan would ever be deductible.

And this assumes you had not paid any principal off the loan since borrowing $90k. If you did you owuld need to do the cumbersome calculations as above for each repayment.

One way you could have fixed things when you became aware of the mistake was to split the loan into 2 portions one being $90k and then immediately pay off the $90k loan.

This is why brokers should not give tax advise

I don't know if there are any rules regarding there being only 1 lender to a SMSF. The assets of a bare trust can only be mortgaged or charged by one lender – I'm not even sure if this is the case actually. But a member can loan funds to the SMSF without security. This can be over and above the secured loan.

A member has to becareful with the interest rate charged. There are some ATO advices out saying you can charge less, but not more. It may even be possible to charge no interest – but be very careful

But, a valuation will only establish the value of the building. This won’t necessarily be what it cost you to construct. You might need to do several things such as valuation, QS report, go back over credit card statements, loan withdrawals etc.