Loan Structuring Advice

Discussion in 'Loans & Mortgage Brokers' started by Shah79, 14th Sep, 2018.

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  1. Shah79

    Shah79 Active Member

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    Sutherland, NSW
    Hello,
    Wanted some advice for one of my friends.
    He owns a property in the joint names of his parents and sister. This property is now fully paid off.

    Property XYZ : Owned by Myfriend(A) + His Dad(B) + His Mom (C) + His Sister (D)
    Each one has a 25% share in the property:

    He now intends to payoff the share of his parents and sister and convert this property into an IP in the joint name of himself and his wife. He intends to borrow the maximum so get the full negative gearing benefits.How does he go about structuring it.

    My questions are:
    1) Will my friend need to pay stamp duty on the full current valuation of the property if he does it?
    2) Would banks lend him the 75% of the valuation amount knowing that he already has 25% of share in the property
    3) Are there any other strategies that he can use to maximize his borrowing for this IP?

    Thanks
    Shah
     
    Shah79, 14th Sep, 2018
    #1
  2. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    1. Duty on the value transferred
    2. if he can service and meet other requirements
    3. yes
     
    Terry_w, 14th Sep, 2018
    #2
  3. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    as an aside, whats the financial benefit from doing this vs a new ip generally, aside from the small stamps saving ?


    ta
    rolf
     
    Rolf Latham, 15th Sep, 2018
    #3
  4. Shah79

    Shah79 Active Member

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    Thank you Terry
     
    Shah79, 16th Sep, 2018
    #4
  5. Shah79

    Shah79 Active Member

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    He wants to payoff his parents and also maximise his Tax benefits by fully owning the property he knows is good for him.
     
    Shah79, 16th Sep, 2018
    #5
  6. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    So why THAT property though ?

    ta
    rolf
     
    Rolf Latham, 17th Sep, 2018
    #6
  7. Shah79

    Shah79 Active Member

    Joined:
    26th Aug, 2018
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    Location:
    Sutherland, NSW
    Thanks Rolf,
    1) He wants to pay out his parents.
    2) He is looking at putting up at subdividing this property and building another one on the subdivided lot.
    This property gives him the flexibility to do things like that.
    Do you see any benefits in him buying another property as an IP and not this one?
     
    Shah79, 20th Sep, 2018
    #7