In Sydney, the ideal time to sell would have been about 12 months ago. Valuations are comming in low these days, eg $600,000 last year, $500,000 now. It seems to be pretty flat now, but should pick up again. Just wait for the pickup to occur.

Now is probably the ideal time to buy.

Terryw
Discover Home Loans
Mortgage Broker
North Sydney
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According to the Tax Payer’s guide (published every year), there is no need to claim rent received from flatmates etc as it is not taxable income. A friend also told me the ATO also said the same thing to her.

But you could declare the income and then claim a perscentage of the costs. If it was a two bedroom place, and one room was rented out, I would suggest you could claim half of everything.

But beware. This could make you lose the CGT exemption. So saving a few hundered dollars now, could cost you thousands later on.

Terryw
Discover Home Loans
Mortgage Broker
North Sydney
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Say your mum had a $500,000 LOC. She could lend you $20,000 for the deposit on a $100,000 property, and maybe another $4000 for costs.

You could then get your own loan of $80,000 for the remainder.

Hopefully in a short period, the property would increase in value to say $130,000 and you could then increase your loan to 80% of this or 104,000. This would be $24,000 extra which you could use to repay good old mum

Terryw
Discover Home Loans
Mortgage Broker
North Sydney
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Rob

Capitalising interest can help you pay off a home loan faster! Despite what you may think, if done properly interest is claimable.

There may also be times when people have no choice but to skip a payment, so it can come in handy.

And what about this scenario:
A person has a home loan with an offset and a LOC securred against the home loan. They want to pay rates of $1000. They could get the money from their offset account, but the interest would go up on their home loan. If they took the money from the LOC, they could claim the interest on this portion and their home loan would still have the lower interest from keeping their money in their offset account.

Terryw
Discover Home Loans
Mortgage Broker
North Sydney
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Please speak to an accountant before you sign. once you sign it may be too late to change.

I would suggest a company be out of the question, and you should look at a discretionary trust or a hybrid trust if you need to negative gear.

Terryw
Discover Home Loans
Mortgage Broker
North Sydney
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You can use a trust to own your personal home, but it is complicated and you have to be careful. The ATO have a ruling out about renting from your own unit trust, and they don’t like it!

You could possibly make short term tax savings, but long term owning your home in a trust is not beneficial because:
– maybe up for land tax (not in QLD apparently)
– up for CGT if you sell
– you will eventually be making a profit on the rent and may have to apy extra tax.

Benefits
– asset protection
– tax savings
– could claim depreciation, furniture, etc.
– if you only intend to live there for a few years, it could be a good idea.

Terryw
Discover Home Loans
Mortgage Broker
North Sydney
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Hello Robert

I am not sure what you are trying to say here.

What I said is correct.

If you have money in an offset account and withdraw that money, the extra interest incurred on the loan would only be deductible if the loan was already for investment or business. There would be no accounting problems as the loans/accounts are totally separate.

If you are using a LOC as a home loan, then withdrawing funds for a mixture of personal and business use could make things messy

Terryw
Discover Home Loans
Mortgage Broker
North Sydney
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Sorry, I meant that CGT may be payable on the sale of your shares.

Terryw
Discover Home Loans
Mortgage Broker
North Sydney
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Dodgee

If you are using a new company to borrow, it is generally not much harder than getting a loan in your own name. The directors will have to give personal guarrantees, so the lender will look at their income etc.

It doesn’t isolate you from debt. If the company cannot pay the loan, then the bank will come after you personally.

ps. I would not recomend anyone use a company to purchase property unless it was a trustee company acting for the trust.

Terryw
Discover Home Loans
Mortgage Broker
North Sydney
[email protected]

I’ve got something like that myself. I would just hang on to it, renting it out. Acerages are getting harder and harder to find, pushing values up faster than average.

Terryw
Discover Home Loans
Mortgage Broker
North Sydney
[email protected]