buying property/VDHG - investment structure

my partner and I sold our main residence recently and we are now with 1.5m to purchase the next home/invest. We don't have other investments and in our mid 30s, and choose not have kids.

My pre-tax income is around 90k/year and my partner is unemployed at the moment/looking for a career change (previous pre-tax income was around 50k/year). We spend about 20k/year on living expenses.

We are living in my grandparents' house rent free. My grandparents will be staying in overseas for the next 6 years, they prefer us staying there instead of renting it out. We can move out and move back at any time.

We don't mind having investments in 1 name only. We are happy to allocate 150k (as a lump sum via CommSec to VDHG and keep it for 20 years, 50k on other shares based on our research). The rest we would like to purchase an investment (main residence in 5-6 years down the track) property. We are open to IPs but my partner can't borrow/prefers simplicity. The suburbs we are interested (property) in are around 1.2m-1.8m.

Is it a sound strategy? If so, how should we structure our investment? e.g, using LOC to buy VDHG? in 1 name only? staying in the property for 1 year for the 6-year rule? Thank you for your suggestions.

 

get some legal advice and tax and credit.

If you buy a property and move in, establish it as the main residence and move out and rent it that is one strategy. You could debt recycle this loan in anticipation of moving back in, or buy shares directly - same tax out come until you move in in terms of claiming interest.

What about the estate planning aspects, land tax, asset protection, serviceability etc. all should be considered. Its not just about the tax. I don't see any need for a LOC.

 

If a ETF lost 15% value ? Market risks are real loss risks.

 

This 1 year timing assumption is also not correct. No minimum time is specified to make your main residence but it must be genuine - not just put a couch there & stay elsewhere.

 

Ask yourself for some very tough questions first before buying anything, especially equities.