Hi All,
Very new to the property investment world but I have been able to put together a couple of strategies based alot on your posts. I would like to have the best strategy in place from the outset.
Here's my situation:
Never purchased a property before.
Have deposit of $50k
Currently earn $75k + super per annum (I am expecting this to increase in the next two years to 100k)
I work for a public company (risk of been sued is minimal)I am considering establishing a DT with a company as trustee (sole director = me).
Two beneficiaries = a corporate beneficiary and myself as the other beneficiary.The idea is that, I will borrow from the bank and lend to the trust (no interest) and the trust will purchase the property.
1) Since the trust is purchasing the investment property. Can I still claim the FHOG and no stamp duty when I eventually purchase a property under my name?
2) Do you know how I could work this with the bank? Surely the bank will want the loan to be asset backed, can the trust give a guarantee? If so does that impact question one?
3) Can the trustee charge the trust a management fee and claim deductions such as the cost of researching potential investment purchases (internet, travel)?
4) Would I be better off simply buying my first property in my own name and avoiding all of the above? I know transferring properties to a trust (later on) can be expensive. I would appreciate any recommendations you all have.
Cheers
MikeHi Mike
Couple of options but being this time of night I will be fairly swift:
1) Yes you can claim the FHOG (assuming it still exists in is current form) if all other quailifying criteria have been met. Purchasing an IP first even in your own name does not disqualify you. The Stamp Duty concession is a different matter and will vary from State to State. Check with the OSR in your State on this.
2) No the Trust cant give the guarantee but you as the Trustee / Shareholder can and this is what they will require.
3) In most cases i would advise any client to buy their first place in their own name, structure it correctly, claim the FHOG and SD concessions and then once they have met the qualifying conditions by all means rent the property out and if renting elsewhere maintain this as your PPOR. Future properties can certainly be purchased in an alternative entity.
Richard Taylor | Australia's leading private lender
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