All Topics / Help Needed! / Help: Wealth Planning Advice needed

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  • Profile photo of VincentVincent
    Participant
    @vincent
    Join Date: 2004
    Post Count: 4
    December 5, 2007 - 11:29 pm

    Hi All.

    Our current situation is this.

    We are moving to Brisbane Qld for work so our problem is: hold and rent out our family home or sell it.

    We have a family home in Hammond Park (HP), worth approx $450,000 and an IP in Bentley (B), worth approx $450,000. Loans owing on HP is $50,000 P&I ($100,000 redraw), and B is $450,000 I only.

    Once we are over in Qld, we are considering buying a family home.

    Can anyone advise what we should do?

    Thanks in advance.

    Vincent

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024
    December 6, 2007 - 12:10 pm

    Hi Vincent

    Firstly congratulations on seeing the light and making the move to sunny Qld.

    One of the downsides with the way in which you have the loans structured is that the funds you use to borrow for your new PPOR here in Brisbane will not be tax deductible even if you redraw down the existing equity you have on the HP property.

    Ideally you want to have the maximum loan used to purchase the investment property (as the interest is Tax deductible) and the minimum amount used to purchase your PPOR (as the interest is not Tax deductible).

    One way around it would be to consider selling the HP property into a Trust structure and using the suplus funds as deposit on your Qld PPOR.

    Obviously need to make sure you can service all debts. Let us know if you need any further information.

    This means that every

    Richard Taylor | Australia's leading private lender

    Profile photo of VincentVincent
    Participant
    @vincent
    Join Date: 2004
    Post Count: 4
    December 7, 2007 - 6:59 am

    Hi Richard,

    Thank you for your reply.
    The problem is that we never envisage going over to Qld to work and that we would have paid off the HP house in another 6 months as PPOR.
    What are the rough $ estimate to setting up a trust fund and benefits of trust structure in my situation?
    Can you provide some numbers for consideration as I am new to this trust structure. I have always thought of the simple method of buy and hoard strategy, hence the Bentley being interest only as I am not living in it, and Hamong Park P&I as I am living in it. The strategy was simple. Pay off HP and look for another investment property and grow it one at a time. Simple.

    Surely there must be a quicker way to grow.

    Thanks in advance Richard, your advice have helped me in the above and realised that there has to be a better way to do this.

    Cheers,
    Vincent

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