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LOs are OK, but i have heard they have to be carefully created so as not to look like an installment contract or they too could be illegal.
Terryw
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Yes, use a LO instead of a installment contract. This will only delay the payment though.
Terryw
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Maybe if the lease comes under the Residential Tenancy Act, then maybe a bond is required. This would vary from state to state.
Terryw
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This will enable the holder to sell the property withou paying stamp duty. The option holder would actually be selling the option. However the vendor is protected in that the purchaser has been locked in, and cannot get out of the contract.
Terryw
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Yes, I would be getting a second and third opinion. The accountant may be suggesting she sell it as she may be able to claim the PPOR exemption (since she first lived in it) and it should therefore be tax free.
But even if tax free, there would be agents fees, solicitor fees, and then when she purchases again stamp duty, solicitor fee etc on the replacement property.
Terryw
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And they will be hard to locate. There are no ‘lists’ or website etc where you could find these properties.
Terryw
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These can be hard to sell as well.
Terryw
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Doesn’t sound very good to me. You may be making $10 per week after expenses. With no capital growth is it worth all the effort?
Terryw
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A redraw would only be tax deductible if the money was used for investment/tax purposes. An offset is good because it is a totally separate account to the loan.
Terryw
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Maybe he should rent out the old PPOR to get some money in, and not be in such a rush to sell as this may lead to him dropping the price substantially just to get a quick sale.
Terryw
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Banks usually will not accept your valuations – often even if done from a valuer on their panel.
It would be good to get a rough idea (maybe from an agent) and then if you intend to go for an increase, use the bank to order your valuation – so you don’t have to pay twice.
Terryw
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Some good points there GP.
I know GP is a HDT user and knows a lot of ins and outs, while I only have discretionary trusts.
I guess if the unit holder of the HDT is sued, then the unit is at risk. The trust assets should be ok. I don’t know what effect this would have, if for example, a person went bankrupt and his unit was seized by a bankruptcy trustee. I suppose the trustee could arrange it so not income was distributed to the unit holder.
Terryw
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Diamond
I think you mean you already have a trust in place, but just signed a contract in your own names?
I am not entirely sure myself, but in some states you should sign the contract as “name ATF XX family trust”. On the other hand, trusts are not legal entities, so the trustee just owns property in his/her name on behalf of the trust. This is noted on a minute by the trustees – and you can protect yourself furthre by putting a caveat on the title after settlement, noting this is a trust property.
Terryw
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Are you sure you are only paying $15,000 for it? Or does your brother have finance on it, and you will only have to put in $15,000 cash? It sounds too good to be true.
Terryw
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And they are probably thinking, lets get a few extra days of interest from these deserting customers.
Terryw
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Lenders will only lend on the lower of valuation or contrat price. So if your commercial lender will lend 70% based on a $100,000 purchase price, and the valuation comes in low at $70,000, then first you will have to ask yourself “am I being ripped off?”, and then have to decide if it will work at the loan would be only 70% of $70,000 = $49,000
Terryw
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ANZ will lend nearly anywhere in Tas, but they will not lend for wraps.
Terryw
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Yes it could work if you buy jointly – but I agree with the otheres, not enough details.
Terryw
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I used to live in Japan, and have looked at it. NAB, and ANZ will lend up to 70% LVR in Japanese yen for property in Australia. But you must be working in Japan, earning yen. If you even leave Japan (ie stop working there), the loan must be renegoitated and changed into AUD.
Terryw
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Cruiser, with a hybrid trust, you would be the unit holder and you would borrow the money so could claim the interest against you own personal income. The trust would then make a nice profit as it no longer has to pay the major expense of interest. This profit can be offset against building and fitting depreciation. The remander of the profit could then be distributed to your spouse or other low income beneficiaries.
If you have nothing to do with the trust, then you will naturally not be able to claim anything, but a loss could be carried forward to the next year to be offset against future profit. I know this is not much help now, but in a few years you will be glad you bought in a trust for sure.
Most bank staff do not understand finance, thats why they work in banks!
Terryw
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