BTW, I think Jo meant, http://www.ato.gov.au

Terryw
Discover Home Loans
North Sydney
[email protected]

ANZ is one of the best and cheapest LOCs available, so they are not trying to rip you off with an inferior product with high interest rates.

the danger with LOCs are some people have these on investment properties and then put all of their salary in, and take it out again. The ATO considers it to be a repayment when the money goes in and a reborrowing when it comes out. So the itnerest on the component withdrawn will nto be deductible.

Other people also have problems because – having all that money available for use means they spend it, waste it on consumer items etc. So their loan never gets paid off. Some of my friends are like this. So these sorts of people would be better off on a normal loan.

Terryw
Discover Home Loans
North Sydney
[email protected]

I seen an accountant about this myself when I had 6 properties and he said I could be classed as a trader with this many properties.

Westan makes a good point in that if you are selling in less than 12 months, then it makes not difference. If you are holding longer and are doing it as a ‘profession’, then you could be classed as a tradder anytime after 2 properties. You have to justify why you shouldn’t be – if audited.

I also know people doing this and claiming the PPOR CGT exemption on every property. ie buy one, live in it and do it up and sell it, and do the same thing again. The ATO could argue that they are in the business of doing this and claim tax on all their sales.

Terryw
Discover Home Loans
North Sydney
[email protected]

1. You do not get any discount for other assets held under 12 months anyway.

2. They are paying you in installments and do not get to ‘own’ the property until they pay the whole lot. But they have the right to occupy the property in the meantime.

Terryw
Discover Home Loans
North Sydney
[email protected]

It depends on the state your property.

In Vic, you must enter into a written agreement with the nominee before you sign the contract of sale. If not, then double stamp duty will be payable. In other states it may only apply for related parties such as spouse and a person nominating their own trust or company.

Check with your solicitor.

Terryw
Discover Home Loans
North Sydney
[email protected]

I agree with aussierogue

Terryw
Discover Home Loans
North Sydney
[email protected]

It looks like IP1 is growing well, so it would be a shame to sell it.

What about selling your shares? that should release enough money to help you live on for a while. Or at least stop revinvesting the dividends to help with the cashflow.

Selling properties is expensive. You have to pay agents fees and CGT and legals etc. And then later on you will want o purchase another one when you get back on your feet again = more stamp duty, legals fees etc. Since IP 1 has grown by about $90,000 in one year, it may continue to grow at a rapid rate.

I myself, would be inclined to stretch it out as long as possible.

And if you do sell, why pay down an IP loan when you still have your PPOR loan. You should not reduce the debt on an IP, but put it all into the non deductible debt.

Terryw
Discover Home Loans
North Sydney
[email protected]

There is a tax determination on what constitutes a main residence. If you email next week i can send you a copy (it is on my work computer).

Some of the things that determine whether or not a place is your main residence include:
– intention
– mail
– phone, electricity, gas connections etc
– electoral roll address
– family
etc

Terryw
Discover Home Loans
North Sydney
[email protected]

I’ve purchased 7 properties without ever seeing them. All went OK, but now these days, I probably wouldn’t do it again. It is good to get a look at the neighbourhood too -which is something you can’t see from a report.

Terryw
Discover Home Loans
North Sydney
[email protected]

alwayscurious

Now may not be the best time to sell – as there is a bit of a slump – depending on the location.

You don’t give the values for you properties, so that makes it hard to answer.

Depending on the values, selling all three in the one year may give you a big CGT bill. Since you wife is on a low income, it may be better to sell you wife’s unit as she would may the lowest CGT.

Also since you have a margin loan, you could sell your shares and use that case to help out. Again there would be CGT consequences.

Terryw
Discover Home Loans
North Sydney
[email protected]