Hi

If you wanted to do a lease option, that could help you out by letting you gain access to equity while waiting for your credit problems to diminish. You can get a loan as soon as you are discharge, but the interest rates will be high, the longer you wait the lower they will get. So after renting for a few years from your daughter, you will be able to cash her out and buy a house that should be worth much more than you are paying for (at that stage). You daughter would benefit as she would get positve cashflow and a small capital gain.

Terryw
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I’d be getting a few more agents around, and probably steer clear of that firm.

Terryw
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Beware of taking advice from friends. Why wait? did it now, add value and access the equity for more properties.

It should have no bearing on CGT – especially if not selling!!

Also you cannot write it off unless it is a repair. If that is the case, you can repair anything anytime – if broken. If not a repair, you can still claim depreciation on building and fittings etc.

Terryw
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There would be heaps of capital gains tax to pay, so why sell? If a good area, just keep and access the equity to buy more.

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Landt

I am not an accountant, but think it would go like this:
$160,000 profit, less costs such as stamp duty, agents fees etc
maybe $10,000 = $150,000
Since you have held it for more than 12 months, this is discounted by 50% = $75,000.
This is just added to your income. If you have purchased jointly with a spouse/friend, then only your share is added.

So say you earned $50,000 for the year. Your taxable income will now be $125,000, and you pay tax based on this amount.
Worse case scenario, would be 50% tax on $75,000 = $37,500 extra tax payable.

These are very rough figures!

Terryw
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Just bear in mind that you cannot simply increase your IP loans and move the money into your home loan, as the interest wouldn’t be deductible.

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Hi

Valuers may be able to give you valuations on the end product, but it is very unlikely that a major lender would lend on these figures (unless lower than the contract price).

Have your considered 95% LVR loans to stetch your cash further?

Terryw
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I nearly bought some land a few years ago that was onsold more than 10 times before settlement! (it was a new subdivision off the plan)

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Paul

I don’t know what you can do in this siutation, maybe a talk with a solicitor would be hte way to go.

Another option is for you to build up as well, add value to your home, and get more of those water views.

Terryw
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How is your money secured? a second mortgage or a caveat or ??

Terryw
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