Hang on Jacked, did you say you got the FHG and rented the house out and never lived in it?
Attention need urgent help- tax!
- Thread starter jacked
- Start date
My thoughts exactly
Jack, it's time you bought a PPOR using the funds in your offset account and moved out of home. That will sort out your positive gearing 'problem' and will stop you cramping your parents style. 
Otherwise just give your parents that $50k for being so nice to let you live off them while you have been earning a good income.
Seriously though, there is nothing wrong with paying tax, so long as you are saving (or paying your loans down). If you are not gearing up and not saving then you should start to worry.
Otherwise just give your parents that $50k for being so nice to let you live off them while you have been earning a good income.
Seriously though, there is nothing wrong with paying tax, so long as you are saving (or paying your loans down). If you are not gearing up and not saving then you should start to worry.
ok i think im now on the right track, and once again thanks for the help, to answer your questions...
1) i lived in my house for 6months then i rented it out, hence me only getting 2 weeks back from my last financial year.
2) family debt, the loan is intrest free.. money was sitting in their account. and as it stands no rush what so ever when they need it back (luckily for me)
i think this is my new game plan, keep putting all money into my offset account, once this acount has reached say 150,000, (in 2 or 3 years) refinance take out more money from the bank use this as my deposit to move out of home and into my own house and then i will be neagtively geard again to allow me to claim the intrest im paying in the property i live in as well as still being able to keep my rental property.
does this sound correct or is their a better way? this is pretty much what PT BEAR said earlier...
1) i lived in my house for 6months then i rented it out, hence me only getting 2 weeks back from my last financial year.
2) family debt, the loan is intrest free.. money was sitting in their account. and as it stands no rush what so ever when they need it back (luckily for me)
i think this is my new game plan, keep putting all money into my offset account, once this acount has reached say 150,000, (in 2 or 3 years) refinance take out more money from the bank use this as my deposit to move out of home and into my own house and then i will be neagtively geard again to allow me to claim the intrest im paying in the property i live in as well as still being able to keep my rental property.
does this sound correct or is their a better way? this is pretty much what PT BEAR said earlier...
When you say 'refinance', it is very important for you to understand that if you 'refinance' your investment property to provide funds for personal use (purchase of your ppor) - the borrowed funds will no longer be tax deductible and it will be a very messy 'mixed use loan'.
The portion of funds in the offset acct should be ok to draw down from but confirm this with your accountant as I have been advised that the offset acct must have a different account no from the actual investment home loan - comm bank will not provide me with this type of seperate loan stating that it forms part of the actual home loan which blurs the line when trying to stay within the tax guidelines!
You should be paying interest only, putting all of your funds into the offset acct and ONLY refinance the investment property to free up funds for further investments. The only way you can pull funds out of your investment properties' loan for personal use would be to finalise it with the sale of the property, or to lose the tax deductibility of that borrowed (for personal use) portion of the loan.
I hope this helped and didn't over complicate the issue.
YES !
That's it mate... if you find you're making too much extra money from this house, and you're worried about the extra tax you are paying on it..... then you might just have enough money to buy yet another investment property and between the both of them you might end up netural cost-income wise...
so you end up with 2 assets and "no tax" !
The idea of investments is that they become positive, you cant eat off negative income !!!
My IP took over 5 years for the rent to cover the interest and bills, so that's great that you got there quicker, you can move onto the next stage of your journey quicker..
My IP took over 5 years for the rent to cover the interest and bills, so that's great that you got there quicker, you can move onto the next stage of your journey quicker..[/QUOTE]
thanks for the great feedback im actually looking into my nexy investment property now... would you consider land or buy another house and rent it out also...
thanks for the great feedback im actually looking into my nexy investment property now... would you consider land or buy another house and rent it out also...
Does land produce income? If not, any expenses are not tax-deductible (not that that is the be-all and end-all). But it will be a purely speculative purchase as it's non-income producing, you will be "gambling" on the value increasing naturally. Unless you plan to build?
I think you detect my bias?
ahahahah i sure do!
it just seems scary to refinance and buy another house so quickly! atm i owe 160 and have 60 in my offset, so if i were to buy another property for say 335 i use my 60 as a deposit refinance another 275 so my total loan will be around the 500 mark but i will have 2 rental incomes.
does this sound correct sorry but im a hardcore amature im just tying to learn as much as i can hope i dont sound like too much of a dumbass...
it just seems scary to refinance and buy another house so quickly! atm i owe 160 and have 60 in my offset, so if i were to buy another property for say 335 i use my 60 as a deposit refinance another 275 so my total loan will be around the 500 mark but i will have 2 rental incomes.
does this sound correct sorry but im a hardcore amature im just tying to learn as much as i can hope i dont sound like too much of a dumbass...
I think fear in this situation is a good thing. Fear can be thought of as "False Evidence Appearing Real". Having fear suggests a requirement for education so as to separate the false evidence from reality. If you had no fear, it would indicate an ignorance to the risks.
It will nearly always be risky to commit more money to investing, but this is where education can make one more aware of these risks, and determine a balance and allow one to overcome any fears.
So keep asking questions, reading books (the local library is ALWAYS a good place to start; you want to look around the 332.4 - 332.6 or so in the non-fiction section.
