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Purchase Strategy

Discussion in 'Real Estate' started by pjb89, 27th Jan, 2007.

  1. pjb89

    pjb89 Active Member

    Joined:
    1st Sep, 2005
    Posts:
    29
    Location:
    Abu Dhabi
    Hiya all,

    I might have an opportunity to leave my current employer where I am residing in Qatar and move to Singapore with a new one. This move has got me thinking on the optimum scenario for purchasing our future PPOR and I would really like your thoughts/suggestions....

    History - I have been working o/s for a number of years now and currently envisage staying o/s for at least another 10 years where I want to be in a situation to retire. I have a wealth creation plan developed from Navra Financial Services for this timeframe. I am a non-resident of Australia for tax purposes and currently do not (legally) pay tax.

    A property we inspected a number of months ago (whilst visiting Australa) is about to come onto the market at long last and we believe this is 'the' one! THE RE agent has been keeping us abreast of the eventual time when this property is to be listed as the current owner was happy enough to allow us to insepct it during the final part of the reno as his plan was to sell the house to fund his next purchase. The managing director has deemed this to be our retirement house and I have been tasked with not only the purchase, but also trying to maximise our taxation situation etc etc. On top of this we are planning on my wife falling pregnant (IVF) at about the same time that we buy the property.

    So this has got me thinking - if I can align all the planets at the same time what are our options...

    (1) We will rent the property out until we return to Oz in 10 years, so which structure do we purchase in? Whilst we have a HDT (Maquarie Group Services) that our current neg geared IP portfolio is held, I believe that purchasing in our own names is the correct decision - any comments?

    (2) The wife is keen to live in the house during the planned pregnancy (hopeful) which might provide us with the 6 year CGT exemption. My logic (rightly or wrongly) is that if we can legally achieve the exemption we will get 6 yrs of cap appreciation on the PPOR without having to worry about the implications of CGT should we ever decide to sell. What is the minimum duration a spouse must live in the PPOR before the 6 year rule is applicable, and is it a FULL exemption considering that I will still be a non-resident for tax purposes (the breadwinner) and be living overseas??

    If (2) above is possible, then we would simply rent the PPOR out and claim the full legitimate tax deductions till we eventually return to Oz. Otherwise we will simply rent it out from day 1 as we can always just buy it as an IP.


    Thanks in advance

    Pedro
     
  2. Nigel Ward

    Nigel Ward Team InvestEd

    Joined:
    10th Jun, 2005
    Posts:
    1,172
    Nick will be best placed to answer your questions, but from memory you can take advantage of the PPOR CGT exemption by moving into and out of the family home multiples times so long as no longer than 6 years elapses each time...

    The other question of course is asset protection. If your wife is the "low risk" person in the relationship then there's a lot to be said for her buying the property in solely or predominantly her name so you get access to the CGT ppor exemption. (Having said that it ain't bulletproof to just have your wife hold the property but it's better than nowt).

    N.
     
  3. pjb89

    pjb89 Active Member

    Joined:
    1st Sep, 2005
    Posts:
    29
    Location:
    Abu Dhabi
    Thanks for that Nigel...I will send Nick M a pm....