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Welcome to Property
Investment Lawyer website
What is Property
Investing?
They say that there are two kinds of people– people who
are property investors, and people who would like to become
property investors!
Property Investors make money by collecting rent, by
renovation and property development. Property Investors
improve their properties, and develop their properties to
boost cash flow. Property investors use joint ventures.
Property investors use trusts as their preferred structures
for asset protection and for tax efficiency.
In this Property Investment Lawyer website, we look at
the legal side of property investment. We look at buying, at
the landlord’s side of renting, at asset protection
structures, at property joint ventures, at finance for
property investment, at landlord insurance, at real estate
taxes and at property development.
We at Cordato Partners Property Lawyers do conveyancing
for Property Investors who love Investment Property. In our
conveyancing practice, we do all kinds of real estate work
and are equally good at purchases and sales, leases and
financing, joint ventures and set up all kinds of property
investment structures!
We love feedback and queries. Contact us via our website,
or by telephone for a free 15 minute consultation – click
the
contact us page.
Why the family home is
Australia’s favourite tax haven
For most Australians, the smartest investment decision of
all is to buy a family home. One reason why is that when it
comes to sell, no capital gains tax is payable on the sale
proceeds.
Family homes have always been exempt from tax when they
are sold. This exemption was both preserved and restricted
when capital gains tax was introduced on 20 September 1985.
The restrictions include: moving into the new home as soon
as practicable, a time limit of six years after moving out
(without buying a new home), and ownership in personal names
(not in the name of a company or trust). If the restrictions
are not observed, capital gains tax is payable.
Family homes used to be subject to inheritance taxes
(death duties and estate duties) when the house was
inherited. But inheritance taxes were abolished in the early
1980s and were not replaced except in one instance: If the
family home is inherited and is not sold within 2 years of
the date of death, then capital gains tax is payable on the
increase in value from the date of death. The 2 year time
limit does not apply (and no tax is payable) if the home
becomes owner-occupied or if the home was purchased before
20 September 1985.
Family homes are exempt from land tax.
And when it comes to retirement, family homes have a
special status for the age pension means test: they are not
counted as an asset, no matter what their value.
Click here to find out
more
Commercial Lease Proposals /
Heads of Agreement
To find out about them,
click here
Can you walk away from a
property purchase without losing your deposit?
In most cases, the answer is no, but there are cases when
you can if there is something wrong with the property. For
more
click
Would you tell your bank if
it made the mistake of handing back the Title Deed to your
home before you paid off your home loan?
For more
click on If your bank makes a mistake,
do you tell them?
Can you use a Caveat over a
property to secure a loan?
If you lend money, using a caveat over a property as
security is a good idea. But make sure the loan agreement is
drafted properly For more
click
Apartments built with
aluminium panels used as external cladding are fire risks
money sinks
See
Who must pay the bill for the Lacrosse
apartments fire?
Why buying a 2 bedroom
home unit or townhouse is a smart move
Tony Cordato discusses with Felicity Heffernan Mortgage
Broker
Click here for the
discussion
Buying an Investment
Property #1
Tony Cordato and Luke Moroney discuss strategies
Click here for the
discussion
Mould in rental houses
What should a tenant do about mould, and what must a
landlord do?
To find out
click here
What can you do with an
abandoned house?
Is it possible to acquire possessory title if you move
in?
To find out
click here
What can a strata owner do
if the owners corporation restricts access to their car
parking space?
To find out
click here
Look out for the 'legal
costs trap' before you take a strata dispute to Court
For more click
Never go to court with a strata
dispute because it may cost you if you win
Evicting tenants in NSW
has just become harder
Click on
Interstate landlords cannot use the
NSW tenancy tribunal to evict tenants.
Does the NSW Sunset Clause
Law protect a purchaser if a property developer uses a
sunset clause to terminate an off the plan contract?
To find out what the court decided in a recent decision,
click here
Is it possible to protect
the family home from creditors?
Not always, but with the right legal advice, your chances
are improved
click here for more
If you can buy a car
privately without a written contract, why can't you buy a
house the same way?
Click here for the
reason why
What is the law for Airbnb
style rentals in Sydney / NSW?
From 2019, new laws will apply to anyone renting their
property for short-term rentals in Sydney / NSW.
Click here to find out
more
Even if you’re renting to
your own brother, ALWAYS SIGN A LEASE
It’s easy to verbally agree to let someone live in your
house, but when the time comes to ask them to leave, it can
be very expensive and messy to evict them if they refuse to
move out.
Click here to find out
more
Property Caveats are a
black box
Click here to
find out what happens when a purchaser caveats the property
they are buying
New NSW policy welcomes
short stay rentals (Airbnb style)
NSW gives the green light to owner-occupiers and
investors to rent houses and home units for short stay (Airbnb
style) rentals
Click here to find out
more
Would you like a birds-eye
view of real estate law in Australia?
Click here to find out
more
An investment loan is not
repayable without proof of the money trail.
Bendigo and Adelaide Bank has failed for the second time
to produce the documents to prove to the court it had the
right to recover money loaned to an investor in the failed
agribusiness scheme, Great Southern 2006 Organic Olives
Income Project.
Click here to find out
more
Purplebricks real estate
promises greater fee transparency for sellers
When selling a property, find out about the total fee
charged by the selling agent, because it will be more than
advertised.
Click
here for more
Are you selling your home
or investment property? Is a flat fee online agent better
than a traditional estate agent? Is it the difference in
marketing?
For a look at how Purplebricks – a well-known online
agent operates,
click here
Do car parking spaces add
value to a home?
Along with the number of bedrooms and bathrooms, the
number of car parking spaces is one of the three standard
criteria commonly used in marketing a home.
Click here to read more
about their value
Don't sign a personal
guarantee to a lease unless you absolutely need to!
For the reasons why you need to think twice before
signing a personal guarantee for retail shop premises
Click here
The news is all bad for
Timbercorp investors
Click here to find out
more
Great Southern Plantations
Investors - Bendigo Bank loan recovery claims can be beaten
When an agricultural investment goes bad, the money
borrowed to fund it remains repayable. Sometimes it's
possible to defeat a loan recovery claim, if you dig deep
enough. This is the story of how the Bendigo and Adelaide
Bank lost a loan recovery law suit for the recovery of a
loan.
Click here to find out
more
Does the lower tax rate for companies make them more
attractive than a family trust for property investment?
Click here to find out
more
Court rules that Airbnb style
holiday letting can be restricted in strata buildings
Click here to find out more
Will interest-only loans soon become a thing of the past?
ASIC has taken its campaign against interest-only loans to a
new level by taking legal proceedings against Westpac.
ASIC wants Westpac to pay a penalty for the interest-only
loans it made to home-buyers between December 2011 and March
2015.
Click here to find out
more
New laws for old for
strata apartment owners
The NSW Government is introducing new strata laws will
impact mainly on management of strata schemes but will also
cover building defects in new buildings and renewal of
strata schemes.
They will affect: * General Meetings * Strata Committees
* Strata Managers * Strata Funds * Maintenance, repairs and
renovation * Strata By-Laws *Building Defects in new strata
schemes and * Redevelopment of existing strata schemes
Click here to find out
more
This decade is all about
income!
It seems that these days, everyone is looking for passive
income & more time!
A lot of younger people are looking at setting up income
streams to provide lifestyle choices and want to build
wealth.
A lot of older people had great jobs and businesses and
needed tax effective investments to reduce tax. But now they
find that that their negatively geared properties are a
negative cash flow trap they would rather not have.
For all, frugality, minimalism and positive cash flow are
becoming the new cool!
This decade, property investment is returning to the
basics – it’s all about income, not capital gains.
Video: Why this decade is all
about income
What are the new renting options?
Is rentvesting or rent to own the best way to get into the
housing market
Click here to find out
more
Fixing water leaks in a
strata apartment or villa can be tricky - not only to find
the leak but also to convince the body corporate to fix the
leak.
Click here to find out
more
How Property Owners can
walk away from sale options if the paperwork is not right
Are you a property owner who is wondering if there is any
way to walk away from the sale option you agreed to and take
back the property?
Click here for more
information
How Airbnb is empowering Boutique
Hotels and B&Bs to build their business
Click here to find out
more
Are you thinking about using
Airbnb to rent out your property?
Click here
to find out more about the legalities.
The property buyers guide to Contract
Deposits
How much is needed, does it need to be a full 10%, what
ways are there to fund a deposit, and what happens to the
deposit after it is paid?
Click here
The property buyers guide to Cooling
Off
By law, home buyers and residential property investors
have a 5 business day cooling off period to change their
mind about buying the property. What is a cooling off
period, and how does it work?
Click here
Without liability
insurance, home owners are exposed to million dollar law
suits
Click to find out more
Is now the right time to
buy off-the-plan apartments in Sydney? Or do you wait until
the property bubble bursts?
Will the new apartment market in Sydney continue to be a
story of demand exceeding supply, or is it a property price
bubble which is due to burst when a glut of new apartments
comes on stream?
Follow this link to
find out the right time to buy as-new units in Sydney at a
30% price discount.
How long do you have to
make a building defects claim against the builder of strata
apartments?
The new Strata Schemes laws in NSW will make it compulsory
for a defects survey to be carried out within a year. This
is a link to my article
Don't wait until it's too late to make
a Strata Scheme building defects claim.
The Landlord’s Guide to
Renting – residential property
Renting advice for tenants / renters is plentiful.
Renting advice for landlords / owners is scarce.
In a tenant’s world, landlords need a good guide! The
Landlord’s Guide to Renting is written for landlords -
property owners - property investors, who need to know the
ins and outs of the law of landlord and tenant, to maximise
their rental property income.
Click for –
Part 1 – Repairs
Part 2 – Rent Increases
Part 3 – How to end a Lease
Part 4 – Quiet Enjoyment, Tenants
breaking a lease
Part 5 – Rental Bond claims
Part 6 – Strata Renting
Part 7 – Landlord Insurance
Part 8 – Tax Guide for Rental
Properties
And also
click for a specialist article
– Why landlords and tenants face special risks when leasing
strata shops, offices and industrial premises
Click here to subscribe
to the FREE Property Investment newsletter.
How to make settling your
home unit purchase smoother
Click Here
When buying commercial
property, you need to know if the price inclusive or
exclusive of GST
Click
Here
Joint Ventures for
Property Investment
Joint Ventures are made for property investment! And they
are easy to put together.
All that is needed is this information:
- How do you put a joint venture together?
- What do you need for a joint venture agreement?
- What is the best legal structure for a joint
venture?
Click here for the
Investor’s Guide to Joint Ventures for Real Estate.
Did You know?
- Joint Ventures flourished in London Coffee Houses in
the 1750s
- Lloyds of London Maritime Insurance began in Edward
Lloyd’s Coffee House in 1688
- Joint Ventures are used for trading enterprises and
in mining, finance and real estate
Property Investment
Structures
Do you use personal names or a property investment
structure to buy property?
There is no black and white answer, because it depends on
individual circumstances.
What is important – is it asset protection, is it tax
efficiency, is it low cost or is it borrowing ability?
Click here for The Investor’s
Guide to Buying Property – In whose name do you buy your
next property?
Loan alert - Why are loan application
forms such hard work?
Have you noticed how loan application forms are
asking for more and more information? How employment,
income, credit card, liabilities and assets need to be more
fully disclosed? And how much paperwork such as payslips,
tax returns, tax assessments, BAS Statements, bank
statements, rent and loan statements is required?
The reason is that the regulatory authorities - in
Australia being ASIC, are requiring lenders and loan brokers
to comply with more rigorous responsible lending practices
when assessing loan applications.
Lenders and loan brokers are responding with more
detailed loan application forms, more supporting
documentation, and more follow up. This is a summary of the
legal requirements under the National Credit Act:
- The lender must make reasonable inquiries about a
customer's requirements and objectives
- The lender must make reasonable inquiries about a
customer's financial situation
- The lender must take reasonable steps to verify the
customer's financial situation
- The lender must make a preliminary assessment
- The lender must provide a credit guide
To find out more,
click here
Why missing a credit card payment makes it hard to qualify
for a property loan
The rules for credit data privacy have changed.
Lenders are now able to swap and share borrower credit
histories.
And, instead of having to wait 60 days to mark a default on
an individual credit file, just 14 days after a payment is
due is now enough for a lender to mark a missed payment –
and affect a credit rating. Just 14 days – in the USA it is
30 days!
We also cover credit files, credit scores and the essentials
of qualifying for a property loan.
Click
here for Why
missing a credit card payment makes it harder to qualify for
a property loan.
Do you need credit repair
or debt consolidation? Is it best to use a firm or do it
yourself?
Click to find out more
Will your swimming pool
pass the pool safety tests under the new laws if you sell or
lease?
Click to find out more
Tax issues for property
investors
Tax must be factored in at each stage of a property
transaction.
- When buying, Stamp Duty and purchase costs are
payable.
- While holding the property, Income Tax and
deductibility of Interest and other expenses,
Depreciation and Land Tax are important.
- When selling, Sale Costs and Capital Gains Tax are
important.
Click here for a Tax
Guide for Rental Properties.
Exactly what expenses can a property investor claim,
particularly a small property investor?
A recent Administrative Appeals Tribunal decision really
opens up the scope for small property investors to claim a
wide range of tax deductions if they can demonstrate they
are carrying on a business of letting rental properties.
What is the business of letting rental properties and
what expenses are claimable as tax deductions if you are
carrying on that business?
Click here for How do
you tell if you are carrying on a rental property business?
Are you
looking to sell your home or investment property?
10 Frequently Asked Legal
Questions answered
Q 1
What legal paperwork do I need to have so that I can sell?
Q 2
What Certificates do I need to have for the Contract?
Q 3
How do I decide upon which real estate agent will do the
best job?
Q 4
What do I look for before I sign a sales agency agreement?
Q 5
When does the Contract for Sale need to be prepared?
Q 6
What items need to be covered in the Contract for Sale?
Q 7
What are cooling off rights and how do they affect a
Contract for Sale?
Q 8
What tax traps do I need to keep in mind when selling a
property?
Q 9
What needs to be done to discharge the mortgage?
Q
10 Do I need to be present at the settlement?
How short stay, Airbnb style
accommodation combines rental returns and capital gains
We all like property where we enjoy both a strong cash
flow and high capital gains.
What defeats most people is that cash flow tends to be
poor in areas of high capital gains, and cash flow tends to
strong in areas of low capital gains.
To give an example, rental returns of about 3% are common
in city beach suburbs such as Bondi, Bronte and Coogee which
are areas of high capital growth, and about 8% in regional
NSW towns such as Tamworth, Dubbo and Albury, which have low
capital growth.
The answer is not to avoid the areas of poor cash flow,
but to work out a way to boost cash flow in the high capital
gains areas.
Airbnb style short stay accommodation provides one answer
– in tourist areas such as near city beaches, or areas with
good transport links to a business hub, a property owner can
boost yields by 50% to 100%.
And yet, you enjoy the same capital gain as your next
door neighbour who doesn’t use Airbnb.
For more information,
click here
Who are Cordato Partners, Property
Investment Lawyers?
This website has been produced by Cordato Partners
Lawyers, as part of its Property Law practice.
We specialise in conveyancing – the sale and purchase of
properties for owner occupancy and for investment, vendor
finance or seller finance, mortgages, caveats, strata and
land subdivisions, commercial leases, joint ventures and
syndicates, mortgage and property disputes, and property
litigation in NSW.
Cordato Partners, Lawyers also has Business Law, Travel &
Tourism Law, and Wills & Estates practices which deal with
transactions and court work.
Contact us by email –
info@propertyinvestmentlawyer.com.au
or by phone (02) 8297 5600. Our office address is Level 5,
49 York Street, Sydney NSW 2000 (near Wynyard Station).
Disclaimer: Because this website contains advice of a general nature,
it is not intended to be relied upon for any specific
situation. For specific situations professional advice
should be obtained. Liability limited by a scheme approved
under Professional Standards Legislation.
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