I think the LVR would depend on the shares. Some shares are considered more stable that others. Probably 70% LVR would be the max, so aim a bit lower, maybe 50% to help you not worry too much about margin calls.

Tax deductibility would depend on the use of the funds, not the security.

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Investor, many banks just do drive bys. These can be good in some ocaisions – if the place is a dump inside, but nice outside.

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Not sure about NZ, but with some lenders here, you can insist on a full valuation so they actually have to go inside.

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Yes, try to use the major banks firstly, if you have no choice then go for the smaller ones. It is not nice to have these fees hanging over you head, just in case you need to refinance in a few years.

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You can always mortgage the land at a later date. Maybe consider these:
– Sell shares now, pay CGT
– Sell shares now, buy proeprty and reborrow for shares = deductible interest
– keep shares and get a margin loan agaist them
etc

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Generally 7-8% seems the norm. maybe less if you have a few properties with the one agent. But in WA things seem different, prices are much higher there, and they have invented many additional charges.

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I must say I cannot really understand the ‘multiplication by division’ theory. I am inclined to say the selling costs and purchase costs on the new one will not make it worthwhile – you might as well just keep the property and increase the loan.

Maybe the only time I would do it is if you think the property has had some quick growth and would be in a long period of no growth while other areas are still growing.

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Yes, should be possible. Most lenders would allow this.

But, why cross collateralise? Why not increase the loan on the investment property and lend that money to the trust to use as deposit.

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I’d bet on the cheaper one because of the ripple effect. People that want to live in the expensive suburb will tend to drift over to the cheaper one pushing up prices – hopefully.

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Here is an interesting case.
The Trustees of the Property of John Daniel Cummins, A Bankrupt v Cummins [2006] HCA 6

A barrister transferred his half of the house to his wife in 1987, he became bankrupt in 2000. The bankruptcy trustee succeeded in undoing this transaction.

see: http://www.tresscox.com.au/resources/resource.asp?id=120

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