All Topics / Legal & Accounting / Just a question of legality

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  • Profile photo of Istvan051Istvan051
    Member
    @istvan051
    Join Date: 2005
    Post Count: 221
    October 21, 2006 - 3:28 pm

    Me and my friend were discusing a few legalities with a couple things

    He has been telling me that with investment properties aparently you can only charge the amount of rent that is destined by wotever the CPI (consumer price index) is in the area of the property. I really thught that you could charge however muchlittle you want provided you have a tenant to pay?

    Also he was saying to me that in his mind if say tomorow i wanted to lend money privatly to X person, than X person would have to pay a minimum market interest rate and that i am not allowed to lend it to X person at a rate any lower than that.

    So basically my second question would be is it legal to lend money privatly at 0% interest?

    Cheers
    Stephen

    Profile photo of Mortgage HunterMortgage Hunter
    Participant
    @mortgage-hunter
    Join Date: 2003
    Post Count: 3,781
    October 22, 2006 - 1:32 am

    I don’t know where your friend gets his info from. Take any further advice with him with a grain of salt.

    He is wrong in both cases.

    You can offer your place to the rental market for as much as you like. The laws of supply and demand will come into effect.

    However if you are claiming deductions against the property then you cannot offer it for less than market rent and claim full deductions. ie you cannot rent it to your mum for $30 pw and claim a huge negative gearing loss. But you can rent it to her for $1000 pw and declare all rent to the ATO….

    You are able to lend money to anyone at whatever rate you like. I would be happy to borrow from you at a 0% rate to show you how it works.

    I am good like that [biggrin]

    Simon Macks
    Residential and Commercial Finance Broker
    [email protected]
    0425 228 985

    Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.

    Profile photo of TerrywTerryw
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    @terryw
    Join Date: 2001
    Post Count: 16,213
    October 22, 2006 - 5:27 am

    I agree

    Terryw
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