Hi everybody,
My partner and I currently have our ppor worth 400k, owe 300k, with an i/o loan with offset, two invesment units worth 220k each, owe aprox 160k each, both i/o loans, I earn approx 120k gross p/a my partner approx 25k p/a, just looking at the best financial setup if we plan to rent out our ppor in the future and purchase a new ppor as well as continuing buying investment properties as funds allow.
Thankyou for your time,
Rob
Hi Rob
Welcome to the forum.
The subject says "trust issues" but there's nothing in the thread regarding trusts.
With your current PPOR, I'd continue to use the offset for parking spare cash and avoid paying down any of the principle as this debt will later become tax deductible.
What are you aiming to achieve with property investing? Do you have a goal in mind or a plan in place?
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
Thanks for the reply Jamie, I was looking at the possibility of setting up a trust, hence the topic heading, basically looking to minimise the amount of tax I pay.
Thanks,
Rob
Hi,
First question is why a trust? Trusts are fairly pricey to set-up and run. What if instead you keep it under your own name or wifes name (perhaps split the expense between the two), and purchase in different states, you will avoid land tax and can deduct any losses against your income.
Will your wife earn more money in the future?, Will you earn less? These are things to consider when determining how to split the house ownership. A few of these points are covered in Margaret Lomas' books.
TerryW would be the best person to talk to about trusts on this site. He is very knowledgable on these matters.
Trusts can be set up and run pretty cheaply, but they are complex and usually cost money in getting tax and legal advice down the track.
There would also be stamp duty on transfers to the trust. It is probably not worth doing for equity of $100k.
If the main residence is in VIC then you may want to look at one spouse buying out the other as this could be done without stamp duty. This can increase borrowings and free up cash for the new PPOR.
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
Thanks for the info, I am in qld, has helped me out,
Cheers,
Rob
You are lucky – in QLD there is no stamp duty on the trust formation. in NSW it is $500.
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
Another bonus of the Sunshine State.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Terryw wrote:Trusts can be set up and run pretty cheaply, but they are complex and usually cost money in getting tax and legal advice down the track.There would also be stamp duty on transfers to the trust. It is probably not worth doing for equity of $100k.
If the main residence is in VIC then you may want to look at one spouse buying out the other as this could be done without stamp duty. This can increase borrowings and free up cash for the new PPOR.
Terryw
I like your thinking – paying unnecessary Stamp duty is painful – I am looking at selling a property between my Trusts and its going to cost around $10k (in QLD) just working out if it will be worth my while.
KeyStrategies wrote:Terryw wrote:Trusts can be set up and run pretty cheaply, but they are complex and usually cost money in getting tax and legal advice down the track.There would also be stamp duty on transfers to the trust. It is probably not worth doing for equity of $100k.
If the main residence is in VIC then you may want to look at one spouse buying out the other as this could be done without stamp duty. This can increase borrowings and free up cash for the new PPOR.
Terryw
I like your thinking – paying unnecessary Stamp duty is painful – I am looking at selling a property between my Trusts and its going to cost around $10k (in QLD) just working out if it will be worth my while.
Key, why are you transferring between trusts?
If only you had held the property in a unit trust – you could then just transfer the units, possibly without stamp duty too
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
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