Forum Replies Created
Hi Andrew
It would work (as in do-able), but you would end up paying tax on your rent, CGT if you ever sell your ‘home’ and stamp duty on the sale. If you were only going to live there for another few years and buy a new house, then it may work out better. Have you done any sums?I don’t think any accountants would recommend this unless you were at risk of being sued – even then you could buy 99% in spouses name and 1% in your own name.
Terryw
Discover Home Loans
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
Depends. Some LOCs allow interest to be capitalised up to your limit, others require monthly payments of at least the interest.
Myydral, it is not that bad is it? She would have had to pay the interest anyway. I don’t think there is anything you can legally do, as the terms of the loan would be in the orignal loan contract. Just remember, don’t trust anyone – get everything in writng.
Terryw
Discover Home Loans
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
Also be aware that the property has to meet the banks requirements as well as meet valuation. Sometimes, for example, they can only take units in certain buildings if LMI is involved (height restrictions etc).
Terryw
Discover Home Loans
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 can sell it, but you can’t free up the deposit until the final settlement.
Terryw
Discover Home Loans
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
A Trust can have employees, but 12 months old??
You can still distribute any amount to minors, but they must pay tax at a rate of about 66% for amounts over $643.
Terryw
Discover Home Loans
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
Not really
Just think of it as an expense like insurance or rates.
Terryw
Discover Home Loans
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
In Australia there are various rules about non residents buying property – it has nothing to do with loans. check out the foregin investment review board.
Going overseas, it depends on the country whether you need citizenship or not.
Terryw
Discover Home Loans
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
Paul
Think of how much non deductible interest you would save by putting that 20% deposit off you home loan instead of your IP (where interest is deductible). The overall balance of the loans would be the same.
Terryw
Discover Home Loans
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
Hi Wes
I also had 6 loans with ANZ, and think nearly everyone of them had problems, wrong documents arrriving, late settlments etc. And two of my properties did not have the titles transferred to myself at settlement – I only found out about this much later. Anyway, to cut a long story short, I have been reimbursed for extra legal fees and other expenses on most of my ANZ loans. They have very good products, but it is like dealing with the public service. (sorry to all public servants out there – I used to be one).
Terryw
Discover Home Loans
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
PK
Writing to the complaints department does help get things moving. I have been speaking to ANZ complaints section about my other loans with them and they have been very helpful.
Also what about writing a letter to the bank asking for a pay out figure for all your loans. tell them you are moving banks because of xxx. Most banks, including CBA, now have a client retention unit whose purpose is to keep customers about to leave. They are emporwere to offer incentives to keep customers.
Terryw
Discover Home Loans
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
It is a good idea to put down yourself as the contact person for the valuer to gain access. That way they have to ring you, and then you can arrange to meet them on site and provide evidence of comparable sales etc (and bottle of wine?)
Terryw
Discover Home Loans
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
It may be difficult to get the block now, but if you all stick together you can make it hard for the developers. I myself rescinded a contract for a unit I purchased off the plan after the sunset clause had expried (didn’t go up in value enough), and the developer could not do anything about it – they had to send back my deposit bond.
Terryw
Discover Home Loans
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 can live away from your home for up to 6 years and still class it as your home even if renting it out, and it will be CGT free if sold. This also apparently applies to the new VTT.
It is section 118-145 of the ITAA. or see TD 95/9.
Terryw
Discover Home Loans
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
Yeah, stamp duty and CGT would be payable, and probably legal fees. It may be better to just leave them as is and buy any future properties in a trust.
If you a sued, the assets held in Trust are usually untouchable – as they are not your assets. The ATO is looking as various schemes related to trusts such as the refinancing princple (where you can claim deductions for things that are usually not dedcutible) and renting your home from a unit trust that you are trustee of. In general, I don;t think they have any problems with Trusts.
If your trust income goes into negative, then this is quarrantined in the trust to be offset against future income, ie you cannot distribute a loss. Hybrid trusts can get around this.
Terryw
Discover Home Loans
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
Also, read up as much as you can before you go, so you can follow and understand what the advisor is saying – you don’t want it all going over your head.
Terryw
Discover Home Loans
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
Say each property returned $2000 pa after expenses (or $38 pw). then you would need 50 of these properties to get $100,000 pa income.
You shouldn’t have to worry about future inflation etc as the rents will hopefully keep rising, so just calculate in todays figures – as Yack suggested.
Terryw
Discover Home Loans
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
Hi Dom
I think you post sounds a bit confusing.
If you are selling two properties and buying one new one ot be your PPOR (have I read it right?), I would put down all my cash on this property first rather than paying off an IP loan. Even if you are on a low income, it is still better to save tax if you can – and your circumstances may change. Putting down a large deposit would mean you will not have to cross collateralise.
Terryw
Discover Home Loans
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
The University of Western Sydney also used to run short courses on this subject.
Terryw
Discover Home Loans
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
have a look at http://www.taxlawyers.com.au/ for starters
Terryw
Discover Home Loans
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
Probably nothing as you are not running a business from the house. You may be able to claim a portion of the heating and lighting etc. please check with an accountant as the ATO has been tightening up on this area recently.
Terryw
Discover Home Loans
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
