LMI Lenders Mortgage Insurance when selling
- Thread starter darrelj
- Start date
Lets say i will sell in the 7th year. ( pl excuse me, this is is the first home i am buying. The lmi is worked out as 12000. I am wondering if this is worthwhile getting.
If i can claim back during tax returns, then is good. But then if selling after about 7-10 years will i have to pay that back or something like that.
If i can claim back during tax returns, then is good. But then if selling after about 7-10 years will i have to pay that back or something like that.
Fir example, let me say an investment house was bought for 300,000 and the toatal borrowing from bank accounted was 330,000 fir this purchase. Say this included stamp duty as well as LMI of 15000.
Ok then in the next 5 years and in stages i deduct that LMI every year when I did my tax returens. 7 years down the track i sell for 400,000. How will the tax return calculated?
Ok then in the next 5 years and in stages i deduct that LMI every year when I did my tax returens. 7 years down the track i sell for 400,000. How will the tax return calculated?
CGT would be based on sale price and costs less purchase price and costs
Assume stamp duty and legals were $15,000
Assume agents comms and legals were $10,000
$400,000 - 15,000 - $10,000 - $300,000 = $75,000
apply 50% discount = $37,500 capital gain on top of other income.
LMI doesn't come into it because you have already claimed it against income.
Assume stamp duty and legals were $15,000
Assume agents comms and legals were $10,000
$400,000 - 15,000 - $10,000 - $300,000 = $75,000
apply 50% discount = $37,500 capital gain on top of other income.
LMI doesn't come into it because you have already claimed it against income.
LMI is not relevant if you have already claimed it. Whether it is nil or $5k or $10k the CGT would be the same.
50% CGT for assets held longer than 12 months.
It's called a PAYG Withholding variation, google the form.
You simply inform your employer you'd like to make a PAYG variation.
This can be useful because it can improve your cash-flow, but often people are better off without it.
Personally I've never used it because $100 / week wouldn't make much difference to our lifestyle, but $5,200 back at tax time buys us a holiday which we didn't have to budget for.
Essentially I think if the cash-flow is going to make a difference, then it's useful, it not, then claim at the end of the year and treat it as a savings plan.
Yes a PAYG variation to the ATO and then you give the ATO response to the employer.
Actually, i did an estimation of tax returns with my accountant. The difference in the tax return between having and not having an investment home worked out to be less by $4000.
Although i am taxed 4k less, the expenses that i would have met out of my pocket ( as interest, rates, water, property management etc) would add up to $4k. So what is the actual benefit of having an investment. For me it looks you spend upfront and claim end of year.
Any thoughts on this?
Although i am taxed 4k less, the expenses that i would have met out of my pocket ( as interest, rates, water, property management etc) would add up to $4k. So what is the actual benefit of having an investment. For me it looks you spend upfront and claim end of year.
Any thoughts on this?
That's because you only see from tax. Even that's just small part of tax in fact.
If you structure it right, it will help you achieve your goals. Investment just tools.
If -$4k, means that you lose money. For me personally negative gearing doesnt suit my strategy. Fact you spend $1, and expect to get return less from ATO doesnt make sense
Have you taken everythign into account.
How much you get back is irrelevant too. If you employer is withholding more tax than they should you will be getting more back. You should be looking at the property stand alone. How much it costs you before tax and how much it costs you after tax.
Then if it is growing more than it is costing you you will be ahead.
By the way this is a bit different question.
I will be travelling to Melbourne from tasmania to inspect my investment home . This is my first visit after i purchase (2 weeks only).
I will fly to Melbourne friday night , hire a car, stay in hotel the friday night. Go to property next day. Then stay in my sisters home till sunday morning , return car sunday and for fly back to tasmania same day.
Which part can i claim here.
I will be travelling to Melbourne from tasmania to inspect my investment home . This is my first visit after i purchase (2 weeks only).
I will fly to Melbourne friday night , hire a car, stay in hotel the friday night. Go to property next day. Then stay in my sisters home till sunday morning , return car sunday and for fly back to tasmania same day.
Which part can i claim here.
Sounds like you are going to visit family so you will have to apportion your trip between the property and the family. maybe half would be deductible - check with your accountant.
