Is this a actually a strategy?

Accumulating a few mil worth of properties and using equity to buy ppor? Has anyone here actually done it?

Our family just got +1 and we only have a 3 bed 1 bath house...

I dont want to share the same bathroom with teenagers.

 

...I'm confused what your first and second sentences have to do with each other?

To answer your question, I'm sure its doable if someone wanted to. It just doesn't seem very tax effective.

 

Boy 5 and partner due in 3 weeks

 

Asking it another way, how do people who have ips upgrade ppor?

Sell some ips, use the offsets, security substitution? Check serviceability you have to increase the ppor loan. As always, finance comes first.

 

Yes plenty of people have done it....

 

Depends if you can afford to do it, comes down to serviceability

 

That's the way i always thought it should be done.
Every personal residence I have done it is that way.
1:Built up the investments
2: used a limited liability company to hold the investments
3: personally loaned the money to the company to start the investments
4: company repaid the loans to me so I could buy my residence
5: now the dividends are used to upgrade or buy houses for the children
6: investments are never sold

At age 5 it will plenty of time to build up the income to buy a house for him

 

The ppor upgrade seems to be for the parents, not the child.

 

The strategy works well for the parents now . I am thinking ahead twenty years time.

 

Not advice, but,
A company usually isnt the best vehicle to hold property, since you dont get the capital gains discount and there is no asset protection.

The company can only repay what you loaned it, so just the deposit. Say you lend it 50k for a 500k property now. In 20 years its 1.5m. 50k wont do much.
Dividends can only be paid to shareholders. Lending to the children may be a problem.
Not selling is great as an idea, but why put it into a structure that kills off cg discounts? A family trust would be more flexible. Then theres estate planning.

 

1: After twenty years I would be very disappointed if dividends are not in the millions.
2: the loan can generally be repaid in a much shorter period than 29 tears
3: the shareholder is a trust for ease of distribution
4: there is no CG tax as assets are never sold
what asset protection do you use ?