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It would be possible to onsell. Whether you should do this or not would be up to you. You still would not get the ‘profit’ until the property settles though.
BTW, you may be able to sell now and still claim the 50% CGT discount. The ATO class a sale to occur on exchange of contracts – which you probably did in 2003.
Terryw
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I think there is a free booklet concerning this on the following accountant website:
http://www.bantacs.com.auTerryw
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Yes you can enter into an option to purchase contract. Find someone else willing to buy and then assign the option to them for a fee. Can save lots of stamp duty by using options.
Have a look in the API magazine. There is a QLD solicitor called Rob Balanda who is selling some books or CDs concerning options.
Terryw
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[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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There are low doc loans with higher LVRs – up to 95%. But the interest rates can be high – very high on some. So it is not the ideal loan to get.
Rates can be fixed on most low doc loans. The fixed rates can also be rather high on these.
Are you sure you cannot obtain a ‘normal’ loan? When factoring in rent from the new purchase, you may qualify.
Terryw
Discover Home Loans
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[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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If someone had a large enough property base, then if they were only to use a portion of the growth (after it happens), as Jeff has shown, then I cannot see how this could not be viable.
In reality, most people at this level would have a few sources of income (which would also be growing), and would only be drawing equity to supplement their lifestyle. Often only temporarily.
Living off equity would not be suitable long term for someone with only a couple of properties with a highish LVR.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Lynn
That may not necessarily be true. A minor can actually enter into a legally enforceable contract in a number of instances. One is when they stand to benefit from the contract. This could be the case with the purchase of property.
Another example: There are many young people employed in fast food restaurants and they are covered by employment contracts.
Terryw
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[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Do a search here as there have been a few lenghty posts already.
Terryw
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[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
What about starting out in shares?
Terryw
Discover Home Loans
North Sydney
[email protected]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
BTW, there was an article about getting out of contracts in a recent API magazine.
Terryw
Discover Home Loans
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[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
It may be enough for your friend to cancel the contract or sale – if that is what he wants. It would depend on the wording of the contract. Really this is an off the plan type purchase (it is a subdivision) so the vendor would likely have covered for delays in the contract.
You friend may have to seek the advice of a better solicitor.
Terryw
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[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Originally posted by Marisa:Hi Terry, do you now use Steve’s strategy, or will you be in the future?
IT would be great to hear from people who are actually using Steve’s strategy for some time.
Regards, M
I haven’t used this strategy exclusively, but have used ‘bits’. I wish I had focused more on Navra’s ideas as I would be better off now.
Terryw
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[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Originally posted by ssab:You have said that you wont make much money on a outback property so why are bothering.
That’s it in a nutshell!
Terryw
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You don’t have to go overseas or to outback towns. Last year 2 of my clients purchased positive geared properties in Sydney – without wrapping or lease optioning.
Terryw
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Section 118-145 of the ITAA (1997) – you can rent your PPOR out for up to 6 years and still class it as your PPOR. But you can only claim one property as your main residence at one time (except for 6 months overlap).
Check with an accountant.
Terryw
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North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
With outback properties, prices are generally rather flat. Not much capital growth occurs.
Without capital growth, there is not really any point in investing in a property. So you have to determine the potential growth prospects for the area you are looking to invest in.
Terryw
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North Sydney
[email protected]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
That’s a difficult question to answer. The best way forward may depend on a lot of things such as if your home in Sydney was purchased pre-captial gains = you could have a house up there as well CGT free. It would be best to sit down with your accountant. Do a few what if scenarios before hand and just go in there and get some advice.
Terryw
Discover Home Loans
North Sydney
[email protected]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 trouble is some people equate being creative with doing things dishonest or illegal.
Maybe one way around you dilemma is to ask for vendor finance, or to try to borrow the deposit elsewhere.
Once settlement has taken place, you could then refinance or increase your loan.
Terryw
Discover Home Loans
North Sydney
[email protected]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
Apostle. Is it really illegal, or do you just need some sort of licence?
Terryw
Discover Home Loans
North Sydney
[email protected]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
Michael has also written a recent summary here:
https://www.propertyinvesting.com/forum/topic/17535/4.html?sortfield=&sortorder=Terryw
Discover Home Loans
North Sydney
[email protected]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
Bradles
Good reply. I agree that buying rural properties now could be a disaster. Some people are more concerned with whether the property is cashflow positive than the deal as a whole.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
