Where is the land?

I am using a town planner now who are located about 5km away from me – yet I have never met them and don’t plan to.

Yngv18 wrote:

Adding spouse name to title for PPOR will trigger CGT? Was the regulation changed recently?

No change in laws recently.
Transfer is a disposal which is a CGT trigger. If the main residence was a CGT exempt asset there would be no CGT. But this property was an investment property before becoming a main residence.

Arvind wrote:

Hi Stuart,
1) Talk to lenders and inform them that the townhouse will become your investment property hence the max loan amount should be on that.
2) Once you purchase the house, contact certified property valuer and get the townhouse valued as this will be your purchase price, & will help you calculate CGT if you decide to sell the unit in future.
3) Get depression sechedule made so that you can reduce tax.

Hi Arvid

1. why?
2. this will be the cost base, but it could still be CGT exempt.
3. Depreciation of fixtures and fittings won’t be available because the house is not new. Only building works could be claimed.

Transfer of title will result in a CGT event being triggered.
Even if there is no consideration it will be assumed you sold to wife at market value.
Because it was an investment it is probably that tax will be payable.

But seek specific advice

The interest rate will depend on how you do it. You could get owner occupied rates if you are careful.
But make sure you split the loan before you deposit the money.

And don’t forget option 3
Keep the cash where it is and just borrow against the main residence for a further loan.

Seems like you have 2 loans related to that property – $150k and $500k.

Are you selling at a lost?

If you don’t pay off the $150k you cannot keep claiming the interest. You could keep the loan open as it is secured by another property you are keeping. But if you direct that $150k to the home loan you would still have another loan of $150k owing – yet not deductible and at a higher interest rate presumably.

If I was you…

Probably borrow up to 80% of the home loan on owner occupied rates and use this to purchase the investment property without mortgaging it. But it sounds like you want more properties than 1 IP so go for 80% LVR on the investment property as well.

Once settled use the main residence loan to pay down the IP loan (to save interest on the higher rate).
When coming up for the second IP redraw from the loan on the main residence and borrow 80% against the new property.

For the third one do the same until you have used up the main residence loan in full. Then ideally you could try to increase the main residence loan more, or redraw from IP1 to pay the deposits.

Each loan should have 1 security
Becareful about hte tax aspects as easy to contaminate loans in this situation, but by doing it you could save a fortune in interest each year.

And get an offset set up on the loan with the highest interest rate. But before that seek legal advice on which names to purchase in and have an offset account on the most tax effective and estate planning effective loan.

A trust may or may not be good so seek specific legal advice – which only a solicitor or barrister could give.

No, they have paid you their paid of the council fees.
If you don’t pay the council will take action against you. you are liable.

Yes a surveyor would be the one to confirm boundaries. This should have been recommeneded by the conveyancer but most buyers wouldn’t do one because of the costs involved. I have never done one myself.

Perhaps the next door has done a survery which they might give you a copy of so as to save you some money – but you might want to check the other sides of the property too.

Keep in mind that if your conveyancer didn’t recommend one they could be negligent and you might be able to sue them and let them make a claim against their insurer, so best not to go back to them now or alert them to it.

Sounds like you didn’t check the boundaries of the property at purchase. I would forget using a conveyancer and get a lawyer to look at this – but perhaps worth waiting to see what they come back with first.