Accountant telling me to SELL

[gerard]

From: Gerard Mclean


Hi I have a house in sydney and 2 IP
one is in my name, one is in both names ,
accountant telling me to sell the one in both names as I am the highest income earner
put the money off my mortgage to reduce
as he say Tax wise better for me
but in my mind I thought never sell,don't know what to do any advise
is it better to get rid of the mortgage first then invest.

 

[WebBoard]

Reply: 1
From: Terry W


Gerard

What happens in a few years when the rent has gone up and they are now positively geared. You will be paying tax on this extra income. If you have one property in your name only and you are still the one with the high income, then you will be paying more tax on this profit.

So I think your accountant may be taking a short term view of the situation.

however, it may still make sense to sell it and pay off your loan, but you have also to take into consideration captial gains tax, real estate agents commission on selling, legal costs etc. And then you will want to buy another property a bit further down the track-and more costs.

Maybe you could buy you wife's half. You will just have to work all the different scenarios out on paper. just some thoughts.

Terryw

 

[DaleGG]

Reply: 1.1
From: Dale Gatherum-Goss


Hi

I have said this many, many times before - but, never, ever sell as in doing so, you give away so much wealth and opportunity.

I also think your accountant has looked at this from a short term perspective.

BTW, why did you buy the IP's? Was it to reduce tax or increase your wealth?

It's a great question to ask yourself in the wee quiet hours of the morning when confronted with problems like this. What am I trying to achieve . . .

Good luck either way

Dale

 

[Jakk]

Reply: 1.1.1
From: Jakk Bass - The SLUM LORD



Dale said.....
>>It's a great question to ask yourself in the wee quiet hours of the morning when confronted with problems like this. What am I trying to achieve . . .<<


A few stubboirs at the time can really put some clarity into the thought process.
Seems that Alcohol puts one in touch with a higher consciousness......works for me...hic.

regards

Jakk the Slum Lord

 

[rob paul]

Reply: 2
From: Robert Paul


Hi
LIKE THE OTHER GUYS i DONT THINK YOU SHOULD SELL.
I have the same problem,but my wife is earning more than me (bless her).

After running through several scenarios including selling our ip that is in joint names,we decided to it was better for her to buy my 50% share in the property and pay down the mortgage on our home.
Using a i/o loan .
This will have a three fold effect of increasing the equity in our home, making the unit more tax effective for her,and we get to keep the unit.
The downside however is she will have to pay stamp duty and fees for a new loan,but over time this will be far better than selling.
Anyway just a suggestion.
YOU MUST FEEL COMFORTABLE WITH WHATEVER YOU DO.
CHEERS BILLYDOG

 

[lawsjs]

Reply: 2.1
From: Jeremy Laws


Instinctively I would not follow the advice of an accountant for investment. In fact if (s)he said 'Sell' I would buy and vice versa.

 

[DaleGG]

Reply: 2.1.1
From: Dale Gatherum-Goss


Hi JL!

I love it!!!

It's a pity that the RBA and many of the board of directors don't something similar. I'm sure that when you take accountants out of the picture most businesses would improve.

Thanks and have fun

Dale