Hey all,
just been reminded about a financing option called ‘Chattelled Leasing’.
Has any-one heard of it being used in Property investing?
The basics – it is used by a bus contracting company that I used to work for to purchases buses using this Chatteled Lease. My understanding is that they pay the GST upfront and so can claim it straight back on their BAS!
Now it doesn’t seem so relevant, but I was thinking that if your structure involves a company as trystee of a trust buying IPs then there’d be GST implications, right?! Please correct me if I am wrong! So … using a chattelled lease would allow you to claim the GST component virtually straight away (You follow me)? This would give you a large chunk of $Marks$ in your pocket to, either continue investing OR reduce our debt.Thoughts any-one?!?!?!??!
Cheers
C@34Our greatest weakness lies in giving up. The most certain way to succeed is to always try something one more time.
– Thomas Edisonhi calvin@thirty4
correct me if I’m wrong but what you are suggesting is the same as the margin scheme in developing and you claim it as you go.
If this is correct then yes we do us this currently.
The accountant does it in the companies bas.here to help
Sorry GR,
I am not familiar with the ‘Margin Scheme’ you’ve mentioned – I have not done any developing as yet.Cheers
C@34Our greatest weakness lies in giving up. The most certain way to succeed is to always try something one more time.
– Thomas Edisonhi calvin@thirty4
The margin scheme is you pay and draw back your gst as you cnstruct there is a formular the tax dept give you most accountants know it.
little bit hard to explain and as most people can’t understand my normal post I don’t think the margin scheme will be easy to explainhere to help
Chatel mortagages have been around for years, they have become more relevant in recent years for taxpayers registered for GST on a cash basis and who want to claim the full amount of GST back in the period of the purchase. Where as if they purchased using a commercial hire purchase the GST would be claimed over the term of the HP.
Use one for an IP purchase? There is no GST benefit to do so over a normal mortgage and the interest rate would probably be higher anyhow.
Regards
tonyGR – LOL you remind me of my father in the way you talk! Hehehe good to see you have a sense of humor about it tho!
tony – my thoughts were if your structure would encompas a PTY LTD as trustee for a Trust buying the house. Surely there are GST implications there?! I’m asking more than stating this, btw.
How does this work anyway? Does the PTY LTD pay GST on an IP?
Cheers
C@34Our greatest weakness lies in giving up. The most certain way to succeed is to always try something one more time.
– Thomas Edisoncal
Residential IP’s are input taxed ie you can’t claim GST on a purchase.
Commercial IP’s different story and you can claim.
Regards
tonyOK tony,
to paraphrase: If my investment structure involves a PTY LTD as trustee for a Trust AND we purchase a Commercial IP, THEN we can utilise a Chattelled Lease option?!Cheers
C@34Our greatest weakness lies in giving up. The most certain way to succeed is to always try something one more time.
– Thomas Edison
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