need some opinions.
Other half and I have just offered (and has been accepted) on a house. We are going to live in this house and are considering buying it within our trust.
Hubbie changed employers about 12 months ago and currently drives 3 hours a day (round trip) to work everyday and it is taking its toll so we have decided to move closer to his work (half way between my job and his) for about 6 years. We would then move back to our current location but not current PPOR (will build on a block we own).This job pays nearly double what he can earn near home so changing jobs isnt an option. Of course these plans could change x number of years down the track but that is what has been decided at the moment.
These are the facts:
My thinking:
The current PPOR- which is currently about 50% owned will increase in value over the next 6 years. We can get the capital gain tax free and then sell that property to the trust. I dont want to do this now as its just added expense. The money gained from this will be used to build a new house on the 3/4 acre.
As the new purchase will eventually be a IP, buy in the trust upfront to avoid having to sell to the trust later, and having to pay stamp duty twice.
Spread the dreaded land tax threashold over the trust and private owned properties.
Questions:
If we do buy this new property in a trust, can depreciation be claimed on this property, even though we are living in it? I am presuming as well that we cant claim any negative gearing for this when we live in it.
Ultimately in the end (if we never buy anything else), we will be living in a PPOR which is currently the vacant 3/4 acre block, with the current PPOR a IP owned by the trust along with the current IP and this new property.
Can anyone see any advantage in buying this new property in the trust?
What would you do?
Other half and I have just offered (and has been accepted) on a house. We are going to live in this house and are considering buying it within our trust.
Hubbie changed employers about 12 months ago and currently drives 3 hours a day (round trip) to work everyday and it is taking its toll so we have decided to move closer to his work (half way between my job and his) for about 6 years. We would then move back to our current location but not current PPOR (will build on a block we own).This job pays nearly double what he can earn near home so changing jobs isnt an option. Of course these plans could change x number of years down the track but that is what has been decided at the moment.
These are the facts:
- We have one IP property in a trust which is one of those Chan & Naylor PIT trusts
- We have a PPOR we are currently living in which is in our names and will be rented out probably forever.
- We have 3/4 acre with just a shed on that we will eventually build on when we return after 6 years in the new location. This block is in MY name only (not joint).
- The new house we are buying, we will live in for about 6 years and after that it will become an IP.
All properties are in NSW and my finance broker will probably finance the current IP with this new property seperately from the rest.
The "new" property is about 30 years old with recent upgrades.
My thinking:
The current PPOR- which is currently about 50% owned will increase in value over the next 6 years. We can get the capital gain tax free and then sell that property to the trust. I dont want to do this now as its just added expense. The money gained from this will be used to build a new house on the 3/4 acre.
As the new purchase will eventually be a IP, buy in the trust upfront to avoid having to sell to the trust later, and having to pay stamp duty twice.
Spread the dreaded land tax threashold over the trust and private owned properties.
Questions:
If we do buy this new property in a trust, can depreciation be claimed on this property, even though we are living in it? I am presuming as well that we cant claim any negative gearing for this when we live in it.
Ultimately in the end (if we never buy anything else), we will be living in a PPOR which is currently the vacant 3/4 acre block, with the current PPOR a IP owned by the trust along with the current IP and this new property.
Can anyone see any advantage in buying this new property in the trust?
What would you do?