All Topics / General Property / rent or mortgage free

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  • Profile photo of symonehsymoneh
    Member
    @symoneh
    Join Date: 2010
    Post Count: 3
    January 7, 2010 - 9:38 pm

    Hi everyone,

    My question is , Is it better to be mortgage free ( in a regional town) by selling our investments and then start to invest again . We currently rent, and I see this a waste .

    Thanks from symone

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213
    January 7, 2010 - 10:53 pm

    Do some sums. Work out all the CGTs and selling costs and try to calculate if it is worth it.
     

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of symonehsymoneh
    Member
    @symoneh
    Join Date: 2010
    Post Count: 3
    January 8, 2010 - 6:20 am

    Hi Terry

    I am new at this , and not sure of all the shortened words what excatly is CGTs ?  After selling the house 3 IN TOTAL, WE WOULD POSSIBLY WALK AWAY WITH $350,00.00 THAT IS PLENTY TO BUILD ( IN A REGIONAL AREA) AND THE PRICES AT THE MOMENT COULD SEE US MAKE A GOOD PROFIT FROM BUILDING ONCE IT IS FINISHED ( SO i WOULD LIVE IN THAT HOUSE FOR 2 YEARS  AND TAKE THE PROFIT AS TAX FREE AS WELL, AND KEEP ON BUILDING AND SELLING UNTIL WE REACHED OUR GOAL) .

    WITH OUR CURRENT RENT AND ALL THE EXPENSES FROM 2 OF THE INVESTMENTS WE SPEND  APPROX $20,000.00 a YEAR OUT OF OUR POCKET.  iF WE WERE TO BE MORTGAGE FREE WE WOULD CONTINUE TO BUY BUT HAVE OUR OWN HOUSE AND NO REPAYMENTS EXCEPT A CREDIT CARD THATS ALL WE HAVE, NO OTHER LOANS.

    tHANK YOU SO MUCH FOR YOUR RESPONSE AM NEW AT THIS SITE, THANK YOU AGAIN

    KIND REGARDS FROM SYMONE

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213
    January 8, 2010 - 6:30 am

    CGT = Capital Gains Tax

    Maybe you could minimise this by selling one per tax year.

    Try to work out what it would cost you in interest if you got a loan to build the new home, and then work out the CGT – it may be cheaper to keep the properties and pay non-deductible interest on your home, live cheaply and repay the loan as quick as you can. Rents should continuously increase on your rentals so the process will gradually speed up.

    Also beware that building and selling may still attract tax even if living in the place if you are doing it in a business like manner.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

Viewing 4 posts - 1 through 4 (of 4 total)

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