GMH

I think you will find that ‘main residence’ only refers to owned properties. Otherwise the rule would be redundant, you have to live somewhere, and if everywhere you lived was your main residence there would be no need for the rule.

There is an example in the legislation (ITAA (1997) Section 118-145) where someone goes overseas for 5 years and is still able to claim the original home as his main resdence. [Although, you could argue that he did not have an Australian main residence at the time.]

I have also asked a ATO tax investigator and he beleives you can still claim the other property as your main residence, even if you are renting elsewhere.

BTW, the relevant section of the legislation can be found at:
http://www.austlii.edu.au/au/legis/cth/consol_act/itaa1997240/s118.145.html

If this could apply in your situation, please talk to a good accountant as it couls save you a fortune.

Terryw
Discover Home Loans
North Sydney
[email protected]

Sorry Doggie, I am a mortgage broker not an accountant. If you want to lear about trusts, just do a search on the forum and buy the buy called “Trust Magic” by Dale Gatherum Goss. http://www.gatherumgoss.com.au

Terryw
Discover Home Loans
North Sydney
[email protected]

You could do it either way. COC is just a measurement used to compare different investment strategies. Infinity is nto real meaningful, so I would calculate it as if using 20% cash deposits. You could be using these deposits elsewhere, so that is what you want to compare.

Terryw
Discover Home Loans
North Sydney
[email protected]

If you are moving out and renting you should be able to take advantage of the 6 year rule. You can still class your oirignal home as your PPOR – even if you earn income, and pay no CGT if you sell. Do a search for more info.

Terryw
Discover Home Loans
North Sydney
[email protected]

Some sort of Trust structure should do you. Try to get a hold of “Trust Magic” a book by Dale Gatherum Goss, a melbourne based accountant.

Terryw
Discover Home Loans
North Sydney
[email protected]

Terry

it is my understanding that you may need a valuation when you move out of your PPOR as it is CGT exempt during this time. The CGT libility begins accurring once you move out (altho there are some ways around this).

What does the Tax Handbook say on this matter?

Terryw
Discover Home Loans
North Sydney
[email protected]

Picja. You are right of course. It was just a slip of the tongue! I meant discharged bankrupt.

Infact, I htink it may even be unlawful for an undischarged bankrupt to borrow money.

Terryw
Discover Home Loans
North Sydney
[email protected]

I agree with Yack that this is a good strategy. I would be a bit wary of property in regional areas at the moment as there may not be much capital gain in the near future (speculation!). It is the capital growth that makes people rich, not the income.

Terryw
Discover Home Loans
North Sydney
[email protected]

As an example, Bluestone Mortgages rates borrowers on the severity of their credit history. If you are bankrupt or in part 9 or 10, you are given the worst rating – ‘BBB’. If you have been discharged from bankruptcy for 1 year or more, you jump up a rung to ‘A’. Discharged more than 2 yrs ago, ‘AA’, more than 3 years ago ‘AAA’. If you have never been bankrupt you are classed as ‘clear’. The worse you credit impairment is the worse the interest rate is, a ‘BBB’ rating can have an interest rate nearly 3% higher than a ‘clear’ rating. Also other tings such as defaults, judgements, arrears etc will affect your rating.

Rates will also depend on the LVR, the higher the LVR the higher the risk.

Terryw
Discover Home Loans
North Sydney
[email protected]

First, it may be wise to get a copy of your credit file to see what is on there. YOu can get a copy from Baycorp for free (they need a signed fax). the web address is http://www.creditadvantage.com.au.

Terryw
Discover Home Loans
North Sydney
[email protected]