Thanks for the reply Joanna,
The block is common title so unfortunatley those options are not availible for this deal.
I was thinking unit trust with a company under the trust. Do you have any experience with any finance applications with the company applying for loan under this structure.
At the moment we qualify for the loan under 70% LVR and current incomes. Do you know how this is effected under the unit trust?
Also we would both look to loan the unit trust 500K each for the purchase to meet LVR conditions. Any experience in complications we may run into?
HI Mark,
Firstly I'll just say that I'm not an accountant or a solicitor, and I'm not giving any advice here; but I'm quite interested in discussing options that a purchaser may have here...
I assume you mean Company Title rather than common title. Will your structure be buying all the shares in the Company that currently owns the title or will your structre be buying the title from the company that currently owns the title. Personally I would go the second option over the first option as you never know what sort of dealings the company has had in the past.
When you say that you are thinking of a unit trust with a company under the trust, I am assuming you mean that you are thinking of a unit trust with a company as the trustee of that unit trust. This would be a better way of doing it rather that having yourself or your jv partner as the trustee personally. Who will own the units in the trust? In this regard you should speak to an accountant about it...perhaps it may be beneficial to discuss options here...the may be benefits to you having another trust structure that has beneficial ownership of the units in the unit trust. then again, I'm a bit of a "security" freak so that may just be overboard, but definately something i personally would look at.
I just thought, a unit trust with a company under the trust could also mean the unit trust with a "bucket" company under the trust to collect excess income, which would then limit your tax to 30%. In this case you will still need to address the issue of a trustee of the unit trust. In this case, I am guessing that it would be the bucket company that borrows the money the buy the property. With respect to finance in this type of arrangement the banks may have a problem as they may want to see that the company is the owner of the property (sures up the banks security).
From a taxation point of view (and i'm not an accountant) you would probably need to get advice on whether it's more beneficial to have a trust own the property rather than a company.
I guess what I'm saying here Mark is that there are many many options available and you would do yourself alot of justice to seek out an accountant who is on top of all this sort of stuff.
Most deals are do-able if you have the right people around you.
I hope i haven't complicated it too much, but instead given you more options to consider.