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Showbags, This sounds like a good idea to me. Just do some sums and talk to your solicitor about it.
Terryw
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I think there is stamp duty exemption still in NSW when transferring between spouses.
Terryw
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It can be worthwhile. I’ve used one myself, and have seen a client that made lots of money on a property sourced through a buyers agent. They can be good at negotiatiing too, often saving more than their fees.
Terryw
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Sounds very risky to me.
There may be a chance of long vacancies if tenants move out, values could decrease and interest rate rises and repairs could eat away any positive cashflow – leaving you with not much.
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
The land is not producing an income, so building on there asap would be a good move – even if negatively geared.
Are you sure the interest on the land is not claimable? I beleive you can claim it, and rates etc, if you had the intention to build on it as an IP. check with your accountant.
Selling shares etc to fund this may or may not be a good idea, depending on how they are performing. Just what out for CGT if you sell.
Terryw
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[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
Can’t be done straight forwardly in a tax effective manner.
Any increase in your PPOR loan would not be deductible if the funds were to be used to pay down your IP loan if you are going to live in this property.
You could sell your PPOR to your trust, borrowing to do so. This would be classed as a sale, stamp duty would be payable again, but CGT would probably not apply as it was your PPOR. The proceeds could be paid off your loan on the old IP. The new borrowings would be deductible for the trust as it is for investment purposes.
However trust losses cannot be offset against personal income, but a hybrid trust could enable this to happen.
Terryw
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[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
Another option is selling half of your IP to your partner. She could borrow to do this and the funds released could be paid off your PPOR. This would save you a bit in real estate fees etc, and you would get to keep the IP while converting non deductible debt into deductible. There may even be stamp duty exemptions.
Terryw
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[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
Kayleen, Are you sure you are doing the right thing?
Watch out for:
– capital gains tax
– buying inferior properties just because they are cashflow positive.Make sure you do your research before you jump into anything.
Terryw
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Mortgage Broker
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[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
You should be exempt on mortgage duty for refinances up to the original loan amount. Borrowers must be the same though. If you have been charged you can apply for a refund through the state revenue office.
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 Monopoly:Originally posted by Terryw:I think you could get away without paying CGT this time, by claiming you last place as the main residence. But if you ever sell the current main residence, you could not claim it as your main residence from the date of purchase until you sold the investment. Can only have one main residence at one time – except for a 6 month cross over period.
How so Terry, if the current PPOR is the claimed main residence??? Had it (the current) not been the case, or less than 6 months (cross over) this may have been possible, but I cannot see HOW they can be exempt.
Cheers,
Jo
Hi Jo
I was assuming that pasandbec would not be claiming the current main property as their main resdience for any overlapping ownership period.
Terryw
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I have a few of his books, and his material is really good.
His courses sound very demanding and tough. You can read a bit about them on his websites:
http://www.bradsugars.com
http://www.action-international.comTerryw
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[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
Yes put the vacant possession clause in there and refuse to settle. (through a solicitor of course)
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
I think you could get away without paying CGT this time, by claiming you last place as the main residence. But if you ever sell the current main residence, you could not claim it as your main residence from the date of purchase until you sold the investment. Can only have one main residence at one time – except for a 6 month cross over period.
So you should probably look at which one has gone up more, and if you are ever likely to sell the current one.
Terryw
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Mortgage Broker
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
I recall reading something recently saying that rental yields have already started to rise in Sydney over recent months. And I think this is what generally happens in the cycle. Values rise so fast, rents can’t keep up. Values then stagnate and the rent starts to slowly creep up again.
Terryw
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Mortgage Broker
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
I’ve spent a few 10s of thousands at seminars over the years, and would have to agree that there is nothing out there in these seminars that you can’t find in books or forums.
But it is not the same. Going to a seminar can really motivate some people, and this could be worth thousands itself. Others can be motivated by reading books too though.
It can help also by hearing something explained rather that reading about it. You tend to get more info at seminars and can learn from others questions.
Then there are the people you meet and the connections you make on the seminars.
Just don’t pay too much for them when you can’t afford it.
Terryw
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Mortgage Broker
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[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
I haven’t used them myself, but know they have been around for a very long time – at least 10 years or so.
Terryw
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[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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Woodsman
Someone else has mentioned this before – you should have used the search function!
ONLY JOKING
Terryw
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Sorry, Zen I was referring to Land Tax. ie trusts usually have to pay land tax even if the land is valued at $1, whereas individuals may not have to pay land tax unless their property is worth $160,000 (or whatever it is now) or more.
Terryw
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Mortgage Broker
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
Make sure you speak to a solicitor. In NSW you could be up for stamp duty again if you nominate an non related party. I think a spouse would be OK though.
Terryw
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Mortgage Broker
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
You won’t get a discount, but holding an ABN may qualifiy you with a ‘better’ lender who may have cheaper rates.
Terryw
Discover Home Loans
Mortgage Broker
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
