You can’t use the 6 year rule in this situation as you are not absent from the whole property.

The cost base of the main residence could be reset at market value when the GF is first income producing and you would then need to apportion based on area.

My understanding is that such a transfer would result in double duty as essentially it is an onsale

I see it unlikely that rates will jump more than 0.25% in any one rate rise so to jump to over 7 would mean a about 12 or more rates rises.

That is capital because it is payment for the property. Any interest component?

It depends on the situation. generally double duty in VIC and in SA. You should seek legal advice before signing any contract.

Start off with the end in mind.

You could gift a small sum to a trust and borrow back with the trust taking a mortgage to secure its debt. Later on the trust might lend you more money which increases your debt to it. The longer this happens the stronger it will be.

Are you sure about that? The ones that I have read have a similar clause, but another clause says you don’t need permission if renting out under a standard residential lease.

if not audited then no problem. If audited you would need evidence you lived there.

I see – it is just a marketing term. More commonly called the ‘gift and borrow back strategy’.

My answers to your questions below:
– What is an Irrevocable Mortgage?
A name for a strategy where a related entity places a mortgage over the property of another entity. It is not really ‘irrevocable’.

– How do you utilise this to protect your equity?
Set up a new discretionary trust which you then contract with and it takes a mortgage over title of your property to secure its interest.

– What are the benefits?
Improved Asset protection on bankruptcy of the individual mortgagor.

– What are the drawbacks?
Complexity
Not 100% effective, especially in the early years.
Estate planning issues on your death
costs

– How does it compare to having a trust?
A trust is needed.

– What are the setup costs?
depends – probably around $5k for the average person.

– Are there any ongoing costs?
Generally not

– Is the setup cost per property or can it be for your entire portfolio?
You could have an equitable mortgage over all your assets, but a real legal mortgage would need to be registered over each property to improve priority to the mortgagee.

Sounds like something that is from America.

Who would be the mortgagee and what would it secure? Where did you hear about it? was the person legally qualified and licenced?