I believe there is still decent money in property ownership and would like to start building a portfolio. I want to set-up a trust structure from the start even if it costs a little more to provide security and set rules from the onset rather than running into annoyances down the track, also flexibility for tax would be great.
We are young and have around 150k in equity in our PPOR due to renovations and growth and also a tidy profit on my first place. My income is 50% higher than my fiancees and likely to move to 100% higher over the next 3 years.
I am not interested in financial protection in case of a split because most of the growth and winfalls have been realised while we have been living together and she will be enjoying any sacrifices we make so if something between us goes wrong i have no doubt she is entitled to half.
I am quite interested in tax advantages in this, as my income moves into a higher bracket and she stays in a lower bracket it would be good if we could direct where the tax bill or deductions go which i believe a unit trust can work with. Also with time she hopes to go back and study so may move to part time.
The aim is to acquire 5 or so residential properties over the next 5-6 years, i would like to get into developing eventually but after the trust matures a little would like to take the PPOR and even our personal finances (no longer require to guarantee things) before we start developing. I want 2 of the properties to be smaller apartments or similar with in 5-7km of CBD, near major transport hubs, furnished aiming for higher value 3-9 month leases the other 3 to be houses probably negatively geared (more due to current rent versus value than a want) within 15km of CBD where its possible to atleast subdivide.
The first property we will probably buy with my fiancées sister (call her 3 for now) she has similar goals to us and will agree to get in writing exit clauses and such.
So finally the questions
Do i speak to my accountant or lawyer around setting this stuff up?
Should i speak to a specialised accountant/lawyer?
What are some basic costs i can expect?
Should i setup a trust for myself and fiancee then from this trust purchase shares/units in a trust which we use to purchase the first property with 3? or can we setup one trust to purchase the property in then when it comes time for us to expand we transfer ownership of unit/shares into a trust name (any tax implications/dutys payable?)?
Where can i learn more about which type of trusts might be helpful i would like to be a little more educated before I speak to my paid professional?
Financing? My current bank suggests getting a LOC or similar on a PPOR then using this as a deposit for the IP, ideally i would like to leave this money in my non tax deductible interest costing loan but want to retain the PPOR as a seperate loan. Any suggestions?
And they have suggested we would be guarantors of the new loan in the trust name now from my understanding this means if we where to need to borrow our personal serviceability would look at this loan very badly. Does anyone know of ways around this?
Sorry for the massive post i want to cover off as many potential questions at the start, thanks in advance for any help.
We are young and have around 150k in equity in our PPOR due to renovations and growth and also a tidy profit on my first place. My income is 50% higher than my fiancees and likely to move to 100% higher over the next 3 years.
I am not interested in financial protection in case of a split because most of the growth and winfalls have been realised while we have been living together and she will be enjoying any sacrifices we make so if something between us goes wrong i have no doubt she is entitled to half.
I am quite interested in tax advantages in this, as my income moves into a higher bracket and she stays in a lower bracket it would be good if we could direct where the tax bill or deductions go which i believe a unit trust can work with. Also with time she hopes to go back and study so may move to part time.
The aim is to acquire 5 or so residential properties over the next 5-6 years, i would like to get into developing eventually but after the trust matures a little would like to take the PPOR and even our personal finances (no longer require to guarantee things) before we start developing. I want 2 of the properties to be smaller apartments or similar with in 5-7km of CBD, near major transport hubs, furnished aiming for higher value 3-9 month leases the other 3 to be houses probably negatively geared (more due to current rent versus value than a want) within 15km of CBD where its possible to atleast subdivide.
The first property we will probably buy with my fiancées sister (call her 3 for now) she has similar goals to us and will agree to get in writing exit clauses and such.
So finally the questions
Do i speak to my accountant or lawyer around setting this stuff up?
Should i speak to a specialised accountant/lawyer?
What are some basic costs i can expect?
Should i setup a trust for myself and fiancee then from this trust purchase shares/units in a trust which we use to purchase the first property with 3? or can we setup one trust to purchase the property in then when it comes time for us to expand we transfer ownership of unit/shares into a trust name (any tax implications/dutys payable?)?
Where can i learn more about which type of trusts might be helpful i would like to be a little more educated before I speak to my paid professional?
Financing? My current bank suggests getting a LOC or similar on a PPOR then using this as a deposit for the IP, ideally i would like to leave this money in my non tax deductible interest costing loan but want to retain the PPOR as a seperate loan. Any suggestions?
And they have suggested we would be guarantors of the new loan in the trust name now from my understanding this means if we where to need to borrow our personal serviceability would look at this loan very badly. Does anyone know of ways around this?
Sorry for the massive post i want to cover off as many potential questions at the start, thanks in advance for any help.
