Newbie - How to Setup?

Hi,

I am new to property investing and want to take the plunge, but want to get it right.

I am interested in building an investment property.

My father and I are interested in investing together and making it a bit of a team effort.
- What are the positives and negatives of setting up a family trust?
- Will both myself and father receive the tax benefits? What are they?

Would I be better off just doing the investment myself?

I am new to property investment and want to get it right at the start so I can keep on going...

Thanks in advance for any help you can provide.

Brendon :)
 
Hi Brendon,

You have a couple of things to consider. If you invest with your father, what happens if one of you has a change in circumstances and would potentially need to sell down the asset? What if one party wishes to renovate, whilst the other does not? Etc etc. The potential problem with buying with another party is that you are both tied to the obligations, creating a level of inflexibility with investing, two words which you generally do not want together.

With regards to family trusts (discretionary trusts), let the accountants chime in, but last time I checked negative gearing taxation benefits could not be carried onto the beneficiaries. There are HDT's which have some taxation benefits, but they have a whole lot of other potential issues....

Ask yourself why you want to invest with your father together, as opposed to both investing separately. Without knowing your circumstances it really is difficult to comment other than this general nature...

Other than that, welcome to the forum! And congratulations on taking the first steps on your investment journey. :)
 
if it is something that the two of you will get some positives from (and will also spur you onto investing as opposed to thinking about investing) definitely worth considering.

Some real downsides to consider including change of circumstances etc.
 
1. consider a unit trust
2. consider a unit trust with voting balances based on a predetermined percentage.

advantages

1. obtain benefits of negative gearing
2. can transfer units between unit holders if and when circumstances change with minimal stamp duty.
3. land tax unit trust will mean you get the land tax threshold.
4. can use the refinancing principle.

DT between two parties would not be recommended.
 
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