Purchasing Property within a Trust - Australia
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- Опубликовано: 7 май 2024
- The ins and outs of purchasing property within a Trust in Australia. How a home loan in a Trust works, how it can increase your affordability, the risks, the other benefits & an idea of how to get started.
You can look at the entire webpage here: bluefoxfinance.com.au/useful-...
And please email any questions or if you'd like to start looking at your own options.
Very nice video. Very hard to find a gem like this. Thank you.
Thanks a bunch. Hoping to put a lot more together on this topic for those that are interested in the intricacies - please keep an eye out.
Incredible insights ..you have answered all the queries in have. Much appreciated to sharing those realistic scenarios !
This is incredibly valuable, thank you for this.
Top video Zac , thanks heaps
Awesome video! One of the few channels who will actually explain the risks as well because you’re not trying to sell a property investment course
Would you like to buy one?
I haven't made it yet (and might never), but you can pre-buy for $20,000. Guarantees you to get rich quick
@@bluefoxfinance Make it $30k and I'm in!
Fantastic Video - you’re explanations were very detailed and easy to follow. Very much appreciated
No problems! I have a lot more to put out on this subject (and related), but just a bit busy with client work at the moment but hoping to get it out in the near future. Id like to include some real life strategies implemented based on income/capital etc.
I'll be looking forward to it. I've watched a few of these videos but found your step by step structured explanations with real life figures more informative. Each step was concise and straight to the point answering questions I wouldn't have thought to ask. Many thanks and looking forward to more videos if and when you can.
@@patricko2848 Thanks. I need to go through a few more fundamentals before I can get there I think. Specifically around debt recycling and yield vs growth (and how they affect future mortgage applications), then I'll try and use a few real scenarios. Get some interesting ones but the strategy is never quite the same for each client.
Great video.
Really great.
Great video. Thankyou
you are teaching something real, please keep it up and don't give up, sometimes it's hard to continue because it looks "boring", but you can turn on the donation button, I'm willing to pay for what I learned
You are the best mate
Amazing Video...
thank you.
Legend, thanks for making this. Please make more type of this stuff. Vids about financial topics. Also if you could share like resources where ppl could read up more about this stuff. Thanks 🙏👍💯💯💯
Thanks Thomas. Very much would like to make more...honestly just swamped with work now so unsure when I'll get to it. The only resources I have are on the associated webpage (in the description) but that's mostly just a write up of the video.
Thanks for the great video.
Scenario I wanted to check with you please.
If you submit a purchase application to a bank (bank A) that will ignore the debt within the company/trust structure (fam Trust A), and then 12 months later refinance that debt elsewhere to Bank B. Then you move to use Bank A again to purchase the next investment property in company trust structure (Fam trust B), will bank A be able to ignore the other debt in Fam Trust A, given they knew about it at one point in time when you initially funded the first property purchase?
If this would pose an issue, wouldn't that mean that you can only use each of the few banks/lenders that accommodate this strategy once, otherwise they would wise up to what you are doing?
Hi Peter.
Generally no need to refinance them. There is a lender who will ignore the debt in a Trust even if they themselves are the mortgagee. Hope that helps.
Hi Mate,
Thanks for the valuable info and time. 6.18 min... "generally company holds the mortgage behalf of the trust" can you plz explain.. us or company who will be the trustee.. should we create a company too...
Hey mate. Head to about 35:20 and that should explain a bit better.
Generally you want a Trust and a Company (Corporate Trustee). The Company holds the property as Trustee for the Trust.
Does this work for PAYG employees?
Yep - employment type doesn't matter as long as you're eligible and have sufficient income
Do you use a new corporate trustee each new trust or can 1 corporate trustee be trustee to all 3 trusts ?
Hi Alisa.
As the Corporate Trustee is technically the owner of the property and a borrower in it's own right (IIOR) and as Trustee for the Trust, you would need a new Corporate Trustee for each Trust.
@@bluefoxfinance thanks for such a quick reply. Why can’t the corporate trustee who is already a trustee for trust 1 not be the trustee for trust 2 and trust 3? Is there a borrowing disadvantage for the same corporate trustee?
Also when you pull equity out of trust 1, can you use that to buy a new property in trust 2 or 3? or the new property will have to be used by the same corporate trustee to be purchased within trust 1 again?
@@alisaparveen628 I assume they can be the Trustee for 3 Trusts, I just don't see a benefit to doing so. I can't see a benefit of having 1 Trustee and 3 Trusts, you may as well just have 1 Trustee and 1 Trust. I am, however, unsure if the Land Tax is calculated per Trustee or Trust. This is probably a conversation for your Accountant.
Generally you may do 3 Trustees and 3 Trusts instead so you can separate the properties depending on what you want to expose to the bank in your application.
Yes, you can pull equity out of Trust 1 to use as a deposit for Trust 2. The common way would be for Trust 1 to borrow $100k from the Bank, then lend $100k to Trust 2.
@@bluefoxfinance thanks so much!!
Hey,
Can you get 100% loans within trusts?
100% LVR: no. 90% is the max, as far as I'm aware.
They often borrow 100% of the property price though. 80% against that property from the bank (80% LVR) and an unsecured loan from the individual (yourself) or another Trust that you control.
The individual or other Trust would be borrowing that 20% from the bank as a secured loan against existing equity.
Thanks for the quick reply.
Understood. 🙏
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It's a bit unclear what is meant by trading profitably as you mention switching to p&i impacting profitability.
Is the accountant letter with regard to accounting profit or cash flow? As a trust will have the same accounting profit in a p&I and IO scenario.
A family trust is a discretionary trust that has made a family trust election. There's a few reasons why you would do this.
Calling the entity X family trust does not make it a family trust.
Hi!
Few things to unpack there:
"Trading profitably" is a little subjective and up to your Accountant. The reason interest-only may be beneficial is because banks usually need a letter usually needs to confirm the Trust is "Trading profitably and able to meet it's commitments", and generally, an interest-only payment is a lower commitment than a P&I commitment
The Accountant letter may be relative to either. I've worked with a large number of Accountant's and a number have a different answer.
I understand that calling "X Family Trust" doesn't make it a Family Trust, that was merely so a term I used so that viewers could more easily understand what I was talking about.
Thanks.
@@bluefoxfinance so if a loan switched over to p&I which was now causing a cash flow deficit, your accountant could continue to provide letters saying X trust is trading profitability?
And banks would accept this? (Despite the fact that the trust is not actually meeting it's obligations due to the cash flow deficit?)