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Was your friend qualified to give such advice?
If the main residence is owned by the lower income earner this may be good for tax purposes if the income will exceed the costs once you move out. But income is only one aspect to consider. What about estate planning, asset protection, CGT, land tax, serviceability, and ability to use various strategies?
If you transfer to a company or trust have you considered the stamp duty, new loans, discharge of mortgages etc? What about land tax going forward?
The building becomes part of the land so ownership of the land is what counts and not who is on the building contract – for tax etc.
Best to get some legal advice.Thanks for the response Terry. However it has made me even more confused. Are you saying its better to retain the land/house in my wife’s name rather than trust/compant etc? Apologies we are very new to this and not sure If I follow you
1) what equity? its at 80% lvr
2) yes very likely, although the government would only become aware of this when you buy another as a PPOR, then you may incur the Stamp duty.
In regards to your situation, seems weird you can buy a new place for 750 and not have to sell the land, but cant afford just the outstanding to build a house?Hi Jaxon,
Thanks for your email
Yes the current land Mortage is at 80%LTV no LMI. I am told by my mortgage broker that I am eligible for Mortages upto 1M. We definitely don’t want to defraud the state or the government around stamp duty. So we will probably build a smaller home at a total land+build of around 700K(as we think that at 850K we are probably close to the ceiling of how much a 4 bedder could go up in value in the south eastern suburbs of melbourne). We live in in it for a couple of years for stamp duty exemption and grant and then possibly upgrade to a bigger homeWarragul
Sorry to be confusing, I went and relooked at the legislation and thought there may be a legal loop hole but turns out in your case it would be illegal. Sorry and hope I didnt cause any confusion, In certain cases each person can get it, for e.g. if you were not living in the same dwelling/legally married in this country.
Thank you Corey for the clarity for Myself and Valluvan
Valluvan in regards to what to do with your money and moving forward, I think an end goal and dream is the best starting point, look at where you want to be and then work out the right path to it.
there are a lot of different options and many have different benefits, but finding the right path that suits your lifestlye and desires is something that will take a bit of time, effort and calculation.
All the best on your journey and any questions I am happy to answer or look up if I dont knowThanks Corey and Jaxon. The mortgage broker has confirmed based on my current earnings, my borrowing potential is upto a million. However he has asked me to wait for atleast 3 months to get bank’s pre-approval. Meanwhile what do u guys think about the below plan:
We have seen a new estate in one of the regional town in the south east Melbourne(which is 1.15 mins by train to the CBD) and land prices are relatively cheaper in comparison to the suburbs of Melbourne and you get more land for your money. Initial research indicates that this town is set to benefit from the planned infrastructure upgrade in that town and the estate is quite close the train station and the main freeway leading to Melbourne. So the question is how about we putting down a deposit for a plot of land and the land settles 9 months from now.At that point in time we either sell it on or build a house and rent it out(we will have the funds to cover the land settlement and we can go for a IO loan for the house). Do you think this is a good option. Newbie hear and need some advice please….
A lot of my friends are buying empty plots of land in new estates as their investments. Is this a good strategy.
Valluvan, If its only in your name you get the FHOG/NO STAMP
your wifes name for second PPOR then same applies if she has never owned the first PPOR.
Kind regards
Jaxon AveryHi Jaxon,
I am slightly confused now… are u saying both wife and I will qualify as first time buyers separately which means we can both buy our first properties separately and get 2 FGOG/Stamp duty benefits in total? I was under the impression only one FGOG/stamp duty exmeption applies for a couple who are buying their first property?Not sure why u think I will put only 100k into the house. Obviously I will top up my deposit with a mortgage for the investment property unless iam missing something from ur question?
Dear Tony and Corey,
Thank you so much for your pointers. Met with a mortgage broker who has suggested to wait for at least 3 months to get some sort of bank pre-approval for mortgage(as I started employment only recently). So looks like realistically our PPOR may happen only after 3+ months…However wife is concerned with the raising land costs in Melbourne and suggests to put in a deposit for a plot
So this is what we have been thinking….
1) Put in a an initial 10% deposit for a plot of land(for investment purposes) which will settle after 6/12 months
2) Once we get the bank’s pre-approval(after 3 months from now),get an established house as our PPOR for around 600K which is within the range of the stamp duty exemption but no first time buyer grant(as it is an established home)
3) Pay the remaining 90% pertaining to the transaction#1 when its time to settle the land.Now the question is how will we ensure that our first time buyer status gets applied to transaction#2 and not to transaction#1(as this will result in maximum benefit for us as first time buyers).
Let’s assume we do only transaction#1, do we need to apply for stamp duty exemption once the land is settled or when we pay the 10% deposit?. If the stamp duty exemption kicks in only when we settle the land then potentially we could do transactions1,2,3 in that order and still apply for the stamp duty exemption for transaction#2. Is this allowed and will it work?
Hope I have not confused anyone… :)
What do u think?
