First prop in trust is PPOR?

[Chris G]

Hi peoples,

I have a few questions about buying PPOR through hybrid trust. PPOR will be first (and therefore only prop for a while) bought (actually built as owner/builder) through trust with the intention of buying IP's with equity gained through building PPOR.

1) On the whole would you recommend buying PPOR through trust in the first place?

2) Is FHOG still available if bought through trust? Or does the fact that its actually a company acting as trustee disqualify you from FHOG?

3) Does the land tax exemption for PPOR in NSW still apply for prop bought through trust?

4) Would buying through trust as owner/builder have any impact?

5) Any other +ve or -ve aspects that the Somersoft brains trust can come up with would be greatly appreciated.

I'm about to purchase Dales "Trust Magic" book but thought I'd ask here as well as others may benefit from the replies.

Cheers
Chris

 

[WillG]

Hi Chris G,

I am not an expert about trusts but believe that if you purchase your PPOR through a trust structure you cannot claim the CGT exemption when you sell it.

You don't need a trust structure to use the equity built up in your PPOR.

If you intend to turn your PPOR into an investment property it may be worth while buying it through a trust.

What sort of trust structure were you intending on using ?

What benefits of a trust structure do you want to use by buying your PPOR through a trust ?

Are you intending on renting the property from the trust ?

Cheers

 

[DaleGG]

Hi Chris

Yes, I would recommenf buying PPOR through a trust if you expect to keep the property as an investment one day when you move onto bigger and better things. And, if you plan on buying a number of properties within the trust.

No, FHOG is not available for trusts. However, in Victoria you can buy a house through a trust and this will not affect your ability to claim the FHOG when you eventually do buy in your own name. I cannot say for other state.

No, in NSW a trust pays land tax on every dollar of land value. That is, there is no exemption as an individual might claim.

No, as an owner builder it should not create any probmes. However, be aware of GST issues etc.

CGT exemptions are available through trusts and so this should not be a concern.

Dale

Originally posted by Chris G
Hi peoples,

I have a few questions about buying PPOR through hybrid trust. PPOR will be first (and therefore only prop for a while) bought (actually built as owner/builder) through trust with the intention of buying IP's with equity gained through building PPOR.

1) On the whole would you recommend buying PPOR through trust in the first place?

2) Is FHOG still available if bought through trust? Or does the fact that its actually a company acting as trustee disqualify you from FHOG?

3) Does the land tax exemption for PPOR in NSW still apply for prop bought through trust?

4) Would buying through trust as owner/builder have any impact?

5) Any other +ve or -ve aspects that the Somersoft brains trust can come up with would be greatly appreciated.

I'm about to purchase Dales "Trust Magic" book but thought I'd ask here as well as others may benefit from the replies.

Cheers
Chris

 

[Jas]

Re: Re: First prop in trust is PPOR?

Originally posted by DaleGG


CGT exemptions are available through trusts and so this should not be a concern.

The only way I know of doing this is via a long term lease from the trust. then you have to watch out for stamp duty on the lease. TANSTAAFL.

Jas

 

[addicted]

hi dale i am about to buy a another ppor, and turn my {now ppor } into a ip .
i have a trust set up,but the props dont have any value as yet
stll in process of otp due to change after september
would it be good for me to sell my 1st ppor into the trust
but as i see it the trust can not borrow
because it has a loan of 410k and no cgains as yet so it has nothing to borrow against
so should i just wait till i get c gains in what is there at the moment ?

 

[Chris G]

Thanks...

Hi peoples,

Thanks for your replies. I have contemplated renting the PPOR from the trust although now I am leaning towards buying as indivudual and selling to trust at a later date. Savings in land tax and FHOG will outweigh the future transfer costs. Reading "Trust Magic" may change my mind!

Cheers
Chris