So i'm currently considering purchasing a heritage listed property on a large block of land, which can't be subdivided. The numbers look good however I discovered that land tax would be approx $11,000 per year.
I would like to buy it as an IP, leasing to a family member. Tax deductability is foremost, however at the same time I can't really justify 11k per year in land tax costs.
Is there a way I could structure the purchase among family members (or trust funds/legal agreements?), so that I could somehow retain tax deductability, while not being liable for land tax?
E.g. something like lending the money (say 1.5mil) as a commercial loan to a family member, who then uses the 1.5mil to purchase it as their PPOR. (However this won't work as the commercial rate has to be > the rate borrowed at, and therefore I could still not take advantage of tax deductability, as I would be making a profit)
However, it also raises issues of asset protection.
Equity is not an issue for the parties involved, with no debt and a substantial portfolio to borrow against. What structures should I be looking into to make this purchase feasible?
I am located in SA.
I would like to buy it as an IP, leasing to a family member. Tax deductability is foremost, however at the same time I can't really justify 11k per year in land tax costs.
Is there a way I could structure the purchase among family members (or trust funds/legal agreements?), so that I could somehow retain tax deductability, while not being liable for land tax?
E.g. something like lending the money (say 1.5mil) as a commercial loan to a family member, who then uses the 1.5mil to purchase it as their PPOR. (However this won't work as the commercial rate has to be > the rate borrowed at, and therefore I could still not take advantage of tax deductability, as I would be making a profit)
However, it also raises issues of asset protection.
Equity is not an issue for the parties involved, with no debt and a substantial portfolio to borrow against. What structures should I be looking into to make this purchase feasible?
I am located in SA.