Best Options Available?

Viewing 6 posts - 1 through 6 (of 6 total)

NoviceM
Member
@novicem
Join Date: 2003
Post Count: 17
February 10, 2004 - 6:04 am
Hi all,
My friend’s negatively geared IP (NSW) is under her husband’s name as he was on the top bracket. Unfortunately, he has lost his job and for the past 3 years remains jobless. Due to his age, it is very unlikely that he will find another job.
What do you think is the best option available to her? She is now earning more than $60k. Should she sell the IP? Or buy it herself or her daughter? If so, what are the expenses related to this?
All comments are welcome. Thank you in anticipation.
NoviceM
Member
@novicem
Join Date: 2003
Post Count: 17
February 10, 2004 - 12:41 pm
Hello..??!!.. We’d really appreciate your comments… Thanks…
Erika
Member
@erika
Join Date: 2002
Post Count: 151
February 10, 2004 - 12:51 pm
Hi noviceM
I would talk to your accountant about this, If he sells it to her it will trigger CGT (if it has gone up)and she will ahve to pay stamp duty.They have obviously been affording it for the last 3 years without the benefit of negative gearing. Sorry I couldnt be of more assistance but she needs to look at why they have this property and does it still meet their goals.
Erika
NoviceM
Member
@novicem
Join Date: 2003
Post Count: 17
February 11, 2004 - 5:46 am
Thanks for your input Erika…
Paul Dobson
Participant
@pauldobson
Join Date: 2003
Post Count: 1,196
February 11, 2004 - 6:54 pm
Hi Novice M
If your friends want to hold onto the property and have the employed partner use the negitive gearing benefit, he will have to sell it to her (I won’t comment here on my thoughts about negative gearing). Of course no GCT would be payable if he sold it to her for the same price he purchased it for. However they would have to pay:
1. The conveyencing costs (they could possibly keep these costs down by using a conveyencing kit).
2. The cost of setting up a new mortgage (find a good mortgage broker and this could easily be nil).
3. Stamp duty (can’t get out of this one as far as I know).
Based on the above they can work out how long it will take to repay these cost(s) from the yearly tax benefits.
Hope this helps.
Cheers, Paul
Paul Dobson | Vendor Finance Institute
http://www.vendorfinanceinstitute.com.au
Email Me | Phone Me
An alternative way to finance your home.
Erika
Member
@erika
Join Date: 2002
Post Count: 151
February 11, 2004 - 9:52 pm
Hi
If you sell the property for below fair market value you may find the tax dept calling. You usually need to be able to prove how much the property is worth.