It would be best to call them in person. That way you won’t get the standard (and conservative) response.

If that was the with the licencing, maybe you could get around this by setting up 2 trusts with different trustees. Or just do 5 or less properties per year. Or just get the licence??

Terryw
Discover Home Loans
North Sydney
[email protected]

FFComm

I am not sure where you get the 15% CGT from. A company/trust structure would not result in CGT being reduced to this rate.

eg. Assuming there was a capital gain of $100,000, with the 50% discount, the assesable gain would be reduced to $50,000 if it was distributed to an individual.

If the gain was distributed to a company, there is not discount. The company would pay $30,00 tax.

The individual may pay a maximum of 50% tax on this (or 48% plus medicare levy). So this $50,000 gain would become $25,000 after tax.

This equals 25%.

Of course, if the individual had a lower taxable income, then there would be a lower rate still, but not necessarily 15%.

Where did you get this rate from?

Terryw
Discover Home Loans
North Sydney
[email protected]

Look for any arears, judgements, defaults etc. If you find any, ask their reasons, and maybe seek further proof.

Also look at how many credit cards are listed, and finance applications for radio rentals etc. They could be over committed.

Terryw
Discover Home Loans
North Sydney
[email protected]

Jarrod

Yes No docs would work, but may need a large deposit, low docs may also work if the person is willing to exaggerate their income.

Terryw
Discover Home Loans
North Sydney
[email protected]

One of my clients had a JV between 3 different groups of people. They had a unit trust, with a corporate trustee. The company had 3 directors. Each party then owned 1/3 of the units of the trust using their own discretionary trusts.

They could then purchase property jointly within the unit trust. If one person wanted out, they could sell their units in the unit trust to the other parties, without having to worry about changing the title to the property.

If two of the parties wanted to buy another property, then they could go jointly with ownership by their discretionary trusts, or they could set up a new unit trust.

One drawback is that each party would be responsible for the whole loan. This can hurt serviceability a fiar bit.

Terryw
Discover Home Loans
North Sydney
[email protected]

The ATO does not like people renting from their own unit trust, see:

TR 2002-18 – “Income tax: home loan unit trust arrangement”

Available from:
http://law.ato.gov.au/pdf/tr02-018.pdf

Terryw
Discover Home Loans
North Sydney
[email protected]

BTW the interest in the above scenario should be deductible as you have borrowed money to purchase a income producing property. Please confirm this with your accountant.

Terryw
Discover Home Loans
North Sydney
[email protected]

It probably oculd be deductible, but you may lose your CGT exemption if you claim it. Better talk to your accountant to make sure.

Terryw
Discover Home Loans
North Sydney
[email protected]

FWIW, I agree with Celivia, If I was selling, I would only accept a reasonable deposit -about 10%. This is to make sure they are serious and to allow me easy access to the deposit if they do not settle. You could legally chase them for the rest, but that would be a hassle. Much easier if it was just given to you from the trust account.

When buying, I am not too concerned about how much I put down, as the full amount will be payable anyway within a few weeks.

And, Moony, I think there would still be a valid contract without a deposit. ‘Consideration’ is the promise to pay, not the deposit.

Terryw
Discover Home Loans
North Sydney
[email protected]

You just have to approach the owner and put you offer to them. If they accept it, talk to your solicitor about getting a option contract drawn up.

Terryw
Discover Home Loans
North Sydney
[email protected]