Forum Replies Created
No. Buyer beware.
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
Hi Terryw
So are there no real strict time/holding rules about selling a PPOR?
Can I buy and sell PPORs as many times as I like without having to worry about any time/holding issues?Income tax than still apply to the profits. The main residence exemption can only apply where the property is held on capital account. Where you are buying with the intention of selling for a profit this will be on revenue account and it will be taxed as income without the 50% CGT discount or the main residence exemption if you live in it.
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
Who told you that? They are confusing the 50% CGT discount with the main residence exemption.
The sale of the main residence could still be exempt from CGT if sold within 12 months.
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 send an email to the agent.
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
It seems the property has been sold for $250,000 more than purchased, but there are other costs that can be used to reduce the CGT – stamp duty, legals, agents fees etc. Let’s say this comes to $50k, that would make a gain of $200,000.
you could then apply the 50% CGT discount so this becomes $100,000. This is added to ‘your’ other income. So if you were working and earned $200,000 from other sources you might pay around $47,000 in tax. If you don’t have any other income at all then the tax would be more like $26,000.
Huge difference to your estimate.
There are plenty of things that you can do to reduce the tax such as contribute to super, prepay interest, realise capital loses.
There are also small business concessions:
a) the small business 15-year exemption
b) the small business 50% active asset reduction
c) the small business retirement exemption and
d) the small business rolloverb) the small business 50% active asset reduction might be available in your situation.
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
Thanks Terryw.
Can I book a session with you or is there still a big waiting list?Lol, yes there are about 10 people on the waiting list atm. If interested could you please sign up here http://terryw.com.au/waiting-list/
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 tax agents or lawyers can provide tax advice. Redwood is a tax agent I believe.
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
1. Make sure you are really maxed out.
2. Do what you can to improve serviceability.
3. Related party loan.
4. Transfer small amount ownership to someone who will help with servicing.
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
Remember security for the loan doesn’t determine deductibility of interest. It is the use that counts.
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
Buying a property is not a taxable supply. Selling it may be.
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
Perhaps it is a breach of copyright or licence – you are paying for one off use.
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
It looks like a lease which is a legal document – a contract.
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
1.
What will the bank do about me if the above is the case?This is something to ask the person giving you credit advice. The bank will probably do nothing as you will have a 30 year loan term and probably have not committed any default.
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
What really annoys me in this scenario is that:
I went to my bank, sat down together with ANZ’s banker (also happens to be a “senior banker”). Did our calculations.
When he checked my personal bank account’s transactions, it is so bluntly obvious that between my and my wife (we both bank with ANZ), after all the monthly repayment and our spending, we still save additional some $3K per month and put those into our offset account to offset our PPOR home interest.
Even when we do take the equity release and the additional monthly repayment of equity release into consideration, the bank’s spreadsheet shows we can still save more than $2K cash per month after all the calculations…
And yet, the answer I am getting is “sorry, your history statement and your ability to save that much money in reality does not count when we do our assessment. We only use our own figure”. In other words, we have a proven track record of our living expenses in detail, that is traceable in ANZ’s banking system and yet, they ignore that and think our living expenses is at an “assumed figure” that is much higher than what is realistically happening. Makes me wonder why bother looking at our transaction history when they are not using it as a source of truth.Banks will need to stress test your ability to pay. They are probably using around 7 to 8% PI payments and basing your spending on standard indexes. Failure to do so would be a breach of the law – your brokers are probably breaking the law (NCCP) by suggesting a scheme to get around this.
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
Legal questions – a tax agent could answer question 2.
1. Obtaining a financial advantage by deception is a crime so banks would care if that is what you are doing.
2. Tax is based on what is done with the property and not what you have told to a bank.
3. Land tax is based on whether you reside in the property or not.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
Consider buying a main residence borrowing 80% and then pay it Down asap while recycling debt by paying the loan off and redrawing to invest. Structure the loan splits to maximise flexibility in doing this.
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
How many years was it not the main residence? Sounds like 2 years so 2/12ths.
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
The period it wasn’t the main residence appears to be 1 year so 1/16
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
Hi Pete
No lender will lend more than the security for the loan, but it is still possible by borrowing secured on another property or unsecured such as a related party loan, eg. loan from 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
This is covered in one of the tax rulings. I can’t recall the answer specifically but I think it may be possible as long as it doesn’t create a new asset.
Best to speak to council or a town planner first to see if possible generally and then to seek specific legal advice on whether it would be a breach of the sis act. A lawyer can give this advice but do can a licensed planner or accountant that is licensed.
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