Hello all.
I have just been approved a loan (west pac) to build a new home on the land we own, with my existing ppr with St geo my LOC is to the max in joint names. this will Classed as investment property.
Our land is in joint names as well. thinking of :
either putting land in my wifes name pay the stamp duty and C.G T Cheaper now than later when the house is buildt.
or putting it in a discre trust and pay capital gains tax now. (cheaper now than later when the house is buildt)
When the house is completed I should have about $300,000 equity to be market ready for property investing.
need some feed bac for this scenrio
thanks guys.
Are you going to hold the new property or sell it?
If it is a build and hold and then revalue and refinance, whose name it is held in can be determined whether it is short term negative or positively geared and your respective MTR's. Ownership may not need to change depending on what your long term strategy is.If it is to be sold after construction, then transferring into the name of the lowest MT payer may be wiser. Do your sums.
Get the timing right also, transferring or selling at the start of a new tax year and you may not then need to submit that years tax return until May 2 years hence, i.e. sell in July 2010, the 2010/11 tax return could be submitted as late as May 2012. You defer having to pay the actual CGT.
Good luck
Gregthanks Reid, for your reply
the new home We plan to build and hold . the ppr I am in now hoping to hold and keep as invest ment . Is it good to keep every property we buy for long term ?
thanks dougie
Dougie,
There is no one answer.
As a general principal, the answer would be yes but it should not be seen as set in concrete never to be questioned.There are circumstances when you should sell, when the future growth/rental rental returns are not stacking up, better opportunities arise, change in personal financial circumstances, even if a body corporate is just too much trouble or you need to diversify.
If your property portfolio say grows to 10 IP's in 15 years time and you want to reduce debt and perhaps increase net rental returns, you may develop a plan to progressively sell that portfolio down for lifestyle reasons and keep 5 with no debt, generating $20k each in rental returns.
Good luck
Greg
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