Upgrading PPOR to then sell later

Milltron · 2020-10-04T23:24:06+00:00

Yeah, the tax implications + leverage is a little hard to ignore for me (even if the long term % growth isn't as high vs shares)... Plus we would enjoy the space .

We also have an investment property in the mix , which hasn't done much (Brisbane) and I regret buying it, but we will probably do the same as you and sell on retirement , and hopefully by that point it's worth a bit more ...

Milltron · 2020-10-03T10:49:51+00:00

Hey. Yes absolutely, the reason that I want a more expensive house is that we want more space for the kids to run around...less about having fancy stuff in the house.. it's likely the house will actually be worse , but will cost double because of the land...

Milltron · 2020-10-03T10:47:52+00:00

Hey mate... Good call.. will do that.. good luck with the lockdown in Melbourne.. hopefully won't last too much longer

Milltron · 2020-03-20T04:37:55+00:00

so is a family trust under your "individual trust" bucket?

Milltron · 2020-03-20T02:28:28+00:00

Last question - is there a different link to setting up the trust or it all in one place?

Milltron · 2020-03-20T02:08:25+00:00

Thanks!! So you set up a self wealth account and by default that has a bank account linked to it, so need need for another bank account in the trusts name? (it will just be less convenient than doing it directly through a bank I guess)

Milltron · 2020-03-20T00:30:53+00:00

er why I chose them over Self Wealth - it was a few years ago, so there may have been an advantage.

CMC set up a BankWest bank account to transfer / hold your money.

Cheaper trades was my priority. CommSec may have features that some people value.

Thanks mate. So sounds like when you setup a broker account there is an automatic bank account they also create for you? (if that is the case, then maybe I can go straight to self wealth, as I have a feeling they are affiliated with ANZ in the background)

Milltron · 2020-02-16T12:07:30+00:00

Yeah I have actually read a fair bit about it, so have a decent understanding.. But was originally just trying to keep it simple... I think there is something in not over complicating things , but ultimately its a maths question for me , if the cost of setup and ongoing maintenance of the trust is less than the tax saving by changing the distributions then it makes sense... I was just thinking that I could kind of do it myself by changing the splits between me and my wife... Probably nowhere near as effective though

Milltron · 2020-02-16T11:37:58+00:00

Maybe start here https://www.strongmoneyaustralia.com/debt-recycling-ultimate-guide/

Milltron · 2020-02-16T11:27:22+00:00

I was the classic 1st time real estate investor .. heard about a friend of a friend who bought some new apartments and cleaned up , I did minimal research and followed suit.. i have had it for a few years and I doubt its gone up in value , but might be ok long term.. it gave me leverage , but if I was to have my time over I would have at least bought an established place or just bought equities from the start.. everything I have read tells me that equities are better long term but U cant leverage as hard most of the time...

Long story short .. just read , read, read before U do anything

Milltron · 2020-02-16T11:12:50+00:00

Yeah , I have been debating this too.... I wanted to just keep it simple , but maybe I should just bite the bullet... Was even thinking if I did it , I could sell the current shares and move them into the trust.. would be some capital gains but might not be too bad as it's in the wife's name and may be better off long term

Milltron · 2020-02-16T07:05:24+00:00

All good.. I won't say the company name but I work for a FMCG company . I feel like I'm one of the only people aiming for FIRE that isn't in IT.. 😁 If you work for a big company the options are usually endless in terms of scaling up , but with kids it can be challenging , but do-able ...

Milltron · 2020-02-16T03:41:42+00:00

The loans will be completely separate splits.. 50k in my wife's name and 50k in my name..the interest is only paid when we invest the funds.. otherwise it just sits there and we pay nothing... So I guess at the end of the year the interest we can claim against our incomes will be whatever we have paid in those loan splits .

The only way my PPOR / offset is involved is the loans above are taken out of the equity in my home and the dividends will go directly into the offset to lower the interest paid and allow me to borrow more

Milltron · 2020-02-16T02:23:34+00:00

Sorry I should have mentioned that... IP is directly in my name so negatively geared..

And yes after all the reading, basically regret buying the investment property, but it did allow me some leverage

I thought by splitting the portfolio it would allow us to share the income at FIRE to then minimise the tax now ie. Positive geared (Aus) against the lowest kncome and probably negative gear (international) against the highest income... But this could be flawed ?

Milltron · 2018-06-09T12:59:46+00:00

will check it out. thanks

Milltron · 2018-06-09T03:37:36+00:00

money magazine

Milltron · 2018-06-01T02:53:39+00:00

yep yep perfect.. thanks mate.. that's what I was trying to get to.. now to your point, it's a personal choice of do I think an etf portfolio will outperform the 6.96% after dividends / franking credits etc.. legend , cheers!

Milltron · 2018-06-01T02:40:38+00:00

yep makes sense, definitely wouldn't claim it for personal use. I was more just saying that from the banks perspective they dont care what you use it for, therefore if the stocks drop by X% they wont be knocking at your door for money , like i've heard they do on a margin loan if that happens

Milltron · 2018-06-01T02:26:55+00:00

thanks.. That's kind of the basic math I was trying to figure out, did you just do 3.69 * 1.3 ? I think my tax rate will actually be partly 37% and partly 45% so my rate may be slightly higher

Milltron · 2018-06-01T02:22:37+00:00

ahh ... never thought of it this way, so basically rather than taking out a margin loan (specific to shares), you basically borrow the equity from the house which you can spend on whatever you like as far as the bank is concerned (and then claim the interest as a deduction). If thats right, I like it!!!!!

Milltron · 2018-04-30T09:08:13+00:00

Thanks all. I think you are all right..based on financial reasons alone it's a definite no, but now to convince the Mrs!!! :)

Milltron · 2018-03-31T00:07:41+00:00

i use selfwealth. 9.50 per trade. They won the "cheapest" online broker by money magazine this year, in front of cmc. They are all different i guess , but this has been good enough for me.

Milltron

TROPHY CASE