I haven’t read any of the replies so apologies if this has mention mentioned above already, but I think you could have set this up better in several ways.

1. Just one name on title and loan.
This would have allowed you extra strategies down the track, improved asset protection, improved serviceability overall and have saved you tax.

2. Paying PI
Paying off loans is generally a good thing, but having IO can allow for so much more flexibility and assist with the saving of tax and early retirement possibly.

3. Paying a deposit on an IP.
If you use offset cash on an IP you will end up paying more tax on the IP and have a higher non deductible debt. Best to borrow 105% for any IP purchase.

4. Using Redraw
It is good to pay down the PPOR loan and then borrow, but using redraw will create a mixed purpose loan and you will then lose money by paying more tax as a result. Split before redrawing.

5. Consider carefully who will own the next property purchase
Can set yourself up for a few potential strategies years down the track.

Yes stamp duty could apply in either case, including removing or adding a beneficiary of the trust.

Don’t forget to consider CGT. But generally this is easier going.

Not much you can do really. Have you sought legal advice?

You should never give a guarantee if possible, and if you need to then just one person should.

Bungee wrote:

Hi allNew to the forum, have one IP and ready to buy two more this year.My accountant does not know enough about property so it’s time to move on, I got a surprise land tax bill as I bought in a family trust, he never advised me this would happen and I believe there is a way to set up a company as a nominee to avoid this. I believe he should of at least warned me I would get hit for land tax. Plus he charged me $200 for a letter to the bank for re-finance! So it’s time for a change.
I need an accountant that can handle self employed with property, north west of Sydney would be preferred but not essential. If you have a great accountant or know of one that fits the bill please let me know.

Accountants are not allowed to advise on land tax as this is a state tax and constitutes legal advice. Yet, he should have mentioned the dangers and suggested you get legal advice.

Not sure what you mean by a company ‘nominee’. If a company is acting as trustee this doesn’t change anything however if the company is acting in its own right it would get the land tax threshold, but then there are different aspects to consider.

You could try Paul at Price FInancial who is in northwest Sydney somewhere – Thornleigh maybe.

Yes uncross them now while you can. Its like taking out insurance – you only need it when you need it but you won’t know when you need it.

Yes that is right AM.

spouses, parents, SMSF (a trust!), related party loans, gifts, etc,

I think your tax agent doesn’t understand borrowing, or he is not acting in your best interest.

Crossing securities is dangerous.

Don’t lend anyone money.

Sorry Fred, I meant the 25% deposit which would be more $42k according to your calcs. You have to work out what you would get investing $42k elsewhere and then compare this to what your return on this property would be.

In terms of building a portfolio you have to consider serviceability. How many loans could you qualify for before tapping out. Unless you have a huge income it won’t be too much. So borrowing now for a property that puts $10 per week in your pocket may mean you cannot borrow later for a property that grows at 10% pa. So there is an opportunity cost.

You won’t get rich buying property that doesn’t grow in value. Positive cash flow is good, but not on its own its not.