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Sounds like a good idea. Brad Sugars talks about this sort of stuff in his books.
Terryw
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If your asking how to ‘move’ equity for tax reasons, then it can’t be done.
Tax deductibility depends on purpose. If you increase the loan on the existing property so you can pay for a new PPOR, then, unfortunately, the extra interest on the increased loan won’t be claimable.
The best bet would be to change the existing loan to IO and pay the minimum off this, and any extra money go into the new loan for the new PPOR.
Terryw
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You can use a disrectionary trust to hold a -ve geared property, but cannot offset the loss against your own income.
Terryw
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Unfortunately stamp duty on the mortgage is not paid by the bank, but by the borrower.
Terryw
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Smet, I may be wrong, but think that company and trust setup costs are not tax deductible.
Sqeaker, register at http://www.lawcentral.com.au and learn more about trusts by going thru the motions of setting one up – doesn’t cost anything.
Terryw
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I beleive that would be possible, check with the Office of State Revenue.
Terryw
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You’re getting the computer, but dad is claiming it? You’re only 16 – and learning fast!
Yes I have heard the same thing. You can get a double deduction. The company buys it for the employee and claims it, the employee can also claim it – depreciating it over 5 years or so. This results in getting it for nearly nothing!!! It only works for certain things which are GST exempt such as laptops and mobiles.
I think there is something about this in “trust magic”.
Terryw
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In that case, you would be able to get a loan for it easily, but both of you would have to be on the loan. Also, many loans have minimum sizes – frequently $50,000+ , but some (eg ANZ) do $20,000 loans.
Terryw
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If you don’t have a loan yet, how can you consolidate the debt? You would need a deposit to get a home loan, but I guess if you had the deposit you would have paid off the cc.
Terryw
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For a second mortgage, you would be looking at legal fees and costs for loan contracts to be drawn. There would also be stamp duty on the mortgage and other govt fees.
A lot of lenders do allow second mortgages, many don’t – I am not sure of which.
Caveats are much easier, but offer less protection.
Terryw
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Often small defaults for phones etc are disregarded if you have a good reason – forgetting is probably not a good reason!
Terryw
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There are private type lenders that would look at these deals. Generally finance would be hard.
Terryw
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Why not go for 30 years as the repayments would be lower, and then pay extra off when you can. That way you have a choice.
Terryw
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What about taking advantage of the different tax years in both Aust and NZ.
Your NZ trust could distribute to your Aust trust in late march – just before the end of the year. So the trust would have no income to pay tax on.
Your Aust trust then distributes income to your NZ trust on 02 Apr, just after the new NZ tax year starts, and before the Aust tax year ends.
You would never have to pay tax!
(at least you never used to!)
Terryw
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Are you sure your solicitor is going to be trustee? Does that mean he/she will be guarranteeing your loans? – that would be good!
I think the ‘controlling’ of the trust would refer to who the appointor is as well as the trustees. The appointor usually has the power to change the trustees – in Aussie trusts anyway.
Terryw
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Good point Derek!
Yes, if you get the valuation assigned to the bank (they usually charge another fee) or tell them initially that it is for a loan with XXX Bank, then it maybe fine.
But sometimes the banks/lenders can be hard to deal with. I had one client who had a valuation, but we had to let the bank order another one with the same valuation company as they had a policy of ‘instructing’ the valuers themselves.
Terryw
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I have seen at least 2 people get returns close to that in Sydney within the last 12 months. It is not the area, but the property you should be looking at.
Terryw
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What do you mean by ‘service’?
I have seen someone use a buyers agent that worked out very well.
Terryw
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Why wouyld you sell? Do you have somewhere else to invest, or are you just thinking this one isn’t performing?
I am like Derek, and like to hold on for the long term. But if this one is not performing, then it may be better to sell and invest elsewhere. But first, are you sure it is not performing?
Terryw
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Brizza
St George will do small places – from memory, anything over 25 sqm.
I have heard of someone with a 12 sqm ‘place’ in Sydney. The person paid cash for it 10 years ago and it hasn’t gone up and they couldn’t find a buyer.
Terryw
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