Hi all,
as I have posted before with details of purchase I will just do a 'small' recap for basic info.
purchased a property in herston qld. for $705k plus duty and costs, in my name only (wife/no income) planned to move existing duplex to front of block and add additional 2 units. small time IP effectively.
delving deeper, eventually got demo approval. now town planner is suggesting going for greater GFA (75%) poss. 10 units (need to question that) using location/opp. uni entrance/Hosp.800m away/on main rd/ transport hub 640m away etc
noticed that it is LMR1 but in a zone 2 (LMR2 effectively) on city map so an inconsistency that could be useful for this argument also but will go into that in detail with planner this week. Planner had already spotted this when I mentioned it.
the scale of this project has the potential to increase enormously from original plan. end value being far greater subject to DA. (2.5-3.5m)
advice now is to set up business and sell the IP to the business paying stamp duty again but provides asset protection. business sounds like a lot of work but will do if needed.
(also leads to when house is demolished/before MCU app. will my recent land valuation ($570k no change from last year) be accepted which would obviously result in lower stamp duty) as it becomes undeveloped land - is that idea pushing it - hope not, I liked that one!
other advice is to use discretionary trust (not sure this actually provides asset protection from what I am reading on here)
hubby works overseas, good net income to secure loan and depending on year/date can have company shares vested, making the income derived fully taxable. (have one large and ugly Cap. Loss from overseas to possibly offset but that is it)
property will be cash flow positive based on income
PPOR debt free/no other debt/some comfortable savings to reduce build costs and loan req.
can provide other details if needed!
do I leave property in my name, use PPOR to secure loan for purchase if income asset (making it tax deductible)
then
revalue after build, borrow heavily against it to secure future IP's and put in family trust (have an 15yr old nsw family trust never used, may need to use new one)
sell half the current block to trust (is this even possible) before loan app.
set up a business.
am fearful of being sold structures I do not actually need and may have issues for future plans. (that being to acquire a buy to hold and rent out portfolio and eventually live off income from rent,(when 4 kids are sorted and grown) and when debt paid down/possibly selling this IP to clear that debt and leave other IP's in trust to live off if they are creating the income needed)
a complicated situation methinks but am going to accountant next week and trying to find pro's and con's of the various scenarios and want to use the time before DA to put this in place with the best possible strategy.
neither of us are in a high risk situation, he works in overseas telecoms industry and I am a stay at home mum so not sure asset protection is a top of the list priority, but you never know!
ideas on this greatly appreciated!
cheers
Michelle
as I have posted before with details of purchase I will just do a 'small' recap for basic info.
purchased a property in herston qld. for $705k plus duty and costs, in my name only (wife/no income) planned to move existing duplex to front of block and add additional 2 units. small time IP effectively.
delving deeper, eventually got demo approval. now town planner is suggesting going for greater GFA (75%) poss. 10 units (need to question that) using location/opp. uni entrance/Hosp.800m away/on main rd/ transport hub 640m away etc
noticed that it is LMR1 but in a zone 2 (LMR2 effectively) on city map so an inconsistency that could be useful for this argument also but will go into that in detail with planner this week. Planner had already spotted this when I mentioned it.
the scale of this project has the potential to increase enormously from original plan. end value being far greater subject to DA. (2.5-3.5m)
advice now is to set up business and sell the IP to the business paying stamp duty again but provides asset protection. business sounds like a lot of work but will do if needed.
(also leads to when house is demolished/before MCU app. will my recent land valuation ($570k no change from last year) be accepted which would obviously result in lower stamp duty) as it becomes undeveloped land - is that idea pushing it - hope not, I liked that one!
other advice is to use discretionary trust (not sure this actually provides asset protection from what I am reading on here)
hubby works overseas, good net income to secure loan and depending on year/date can have company shares vested, making the income derived fully taxable. (have one large and ugly Cap. Loss from overseas to possibly offset but that is it)
property will be cash flow positive based on income
PPOR debt free/no other debt/some comfortable savings to reduce build costs and loan req.
can provide other details if needed!
do I leave property in my name, use PPOR to secure loan for purchase if income asset (making it tax deductible)
then
revalue after build, borrow heavily against it to secure future IP's and put in family trust (have an 15yr old nsw family trust never used, may need to use new one)
sell half the current block to trust (is this even possible) before loan app.
set up a business.
am fearful of being sold structures I do not actually need and may have issues for future plans. (that being to acquire a buy to hold and rent out portfolio and eventually live off income from rent,(when 4 kids are sorted and grown) and when debt paid down/possibly selling this IP to clear that debt and leave other IP's in trust to live off if they are creating the income needed)
a complicated situation methinks but am going to accountant next week and trying to find pro's and con's of the various scenarios and want to use the time before DA to put this in place with the best possible strategy.
neither of us are in a high risk situation, he works in overseas telecoms industry and I am a stay at home mum so not sure asset protection is a top of the list priority, but you never know!
ideas on this greatly appreciated!
cheers
Michelle
