Dear all investors,
I have a fully owned villa which I currently lived in, and would like to buy a bigger place. How can I purchase another property without selling the villa and still benefit from negative gear. I don't want to sell the villa as it holds sentimental values. I have an approval from the bank to buy units in my family trust which I can access to purchase an investment property. So I was thinking of selling the villa to the trust and fully owned the new property (PR).
Is this the only way or is there a better way???
What taxes will incurred with selling to your trust???
Your suggestions and advices are much appreciated.Thanking you in advance!
Lady ONo taxes in selling an owner occupied property (usually), but your trust will have to pay stamp duty on the purchase. Best to speak with a good accountant to get some advice before proceeding. You need to determine if the cost of the stamp duty can be justified by the savings in tax in future years. And remember trusts cannot distribute losses.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Trusts in some states have zero land tax exemption which means you may pay land tax on the whole value, although with a villa it should not be too bad.
Also remember as you no longer own it it will no longer be exempt for CGT. so don't go in with a low value to save on stamp duty as the transfer price will be your original cost base in the trust…and as Terry said go see an accountant as these are big numbers, and there are differences between states.
Thank you Terry & GMH454 for pointing out CGT & transfer price (stamp duty)…….didn't think of that. Will speak to an accountant.
As a new investor thirsty for education, I find this forum very informative and helpful. Thank you again.
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