A house and land package in Perth, whether previously occupied or built from the ground up, is one of many steps to achieving the Australian dream of home ownership. Investing in one residential property has its fair share of advantages. However, what if a review of your finances gave you enough room to aim for a second house? The developer that sold you the first house and land may guide you to invest in it, but some pitfalls must be hurdled.
Searching for a second home will require gathering information on potential tax implications, as the Australian Taxation Office can impose a capital gains tax once you close a deal. A discussion with your preferred developer and an accountant works in this regard, especially when you’ve set sights on a few properties.
Sometimes, home buyers use the equity on their existing home to buy the second house. This option is viable as lenders base the expected amount of their applicant’s loan on the actual equity value of the collateral property. However, some loan experts advise saving at least six months’ income before taking out a loan, to help you create a buffer against defaulting.
Pay them back
If you bought the new place and leased it off, it actually aids you in efforts to pay off the loan. Assess your cash flow and tax liabilities as well with a property agent’s assistance.