Just wanting advice on how to positive gear we have an estate and wanted to buy something of lesser value than the estate which there is no monies owed to the house would we need to get a loan or is the equity in the house used
Thankyou in advance
There are simply too many variables here to do your question justice!!! Tax law, trust law, land tax, etc etc etc etc.......it is not possible for anyone to give you an answer worth reading without first getting a bucketload of details on how, when, who, what, why, where......which is where a decent bean counter with experience in estates is going to be a must for you.
As I often say, as a rule of thumb get someone with CA or CPA after their names......it sounds elitist, but many other accounting designations are nothing more than memberships, without any real qualifications and training behind them.....
training, qualifications and experience are the things that you need here.....and ALSO an ability to communicate with you......do some homework before you fork out your hard-earned money on some advice, and be prepared to ask a LOT of questions......because if the adviser has not got the ability to break it down for you in terms that you CAN understand, the chances are they really dont know what they are banging on about.
Positive gearing is merely a fancy word for an asset that generates more income than it costs to keep (expenses). In theory any assets, if you put enough equity and money into it, and set up up to maximise income can become positively geared.
As an example, an investment where the rental income is greater than the expenses such as mortgage, management and maintenance costs is considered to be positively geared. Rental income can be maximised by setting up dual occupancy / building granny flat etc and mortgage repayments can be minimised by borrowing less or structuring it to your benefit.
If you are drawing on the equity of your existing property, then yes, you are effectively setting up a loan and borrowing against your existing property as security, as well as securitising the loan against the new property. You can't access equity without borrowing against it or cashing out the equity by selling the property
Would be happy to help if you want to elaborate on your current financial situation and plans.