your advice is appreciated

Viewing 7 posts - 1 through 7 (of 7 total)

Solka
Member
@solka
Join Date: 2005
Post Count: 2
February 9, 2005 - 1:51 pm
Hi all,
you are all so smart – please suggest if this is going to work for us…
We are buying family house $400k (borrowing 100% against our existing house), we also have our first existing house with is only $84 k debt (joint names deed) on it. Even if I rent it out – I am positively geared and this in not preffered way for my tax offsets – I would like to get some TAX back!..
I thought if I SELL my share of the existing house to my husband for $200k (as the market rate for our first house is $400k) and borrow another $200k MYSELF to get the new property, would be husband be able to get renting offsets (negatively geared this time) from our first house? HAve you ever heard of things like this being done?
any advice is appreciated…
Ta Olka
brahms
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@brahms
Join Date: 2004
Post Count: 485
February 9, 2005 - 2:03 pm
pretty transparent from the ato perspective i’d suggest – but hey, i’m no accountant…
cheers
brahms
CALL NOW…adults only (boys and girls ask mummy or dad first) ~~ 1900 hot broker ~~
Solka
Member
@solka
Join Date: 2005
Post Count: 2
February 9, 2005 - 2:08 pm
Quote:
Originally posted by brahms:
pretty transparent from the ato perspective i’d suggest – but hey, i’m no accountant…
cheers
brahms
Hey thanks – but I wonder what is the difference to ATO? It is a legite transaction? AS far as they concerned he is renting and I just bought my house for our family?
thanks for your time Olka[blush2]
Derek
Member
@derek
Join Date: 2004
Post Count: 3,544
February 9, 2005 - 2:24 pm
Hi Skolka,
As you are transferring an asset from one person to another within a single relationship it is important that the transaction is very legitimate as such transactions will raise an ATO flag and they may come to audit your books.
By the way this was an option that we (the wife and I were exploring some years ago).
I would also suggest you discuss the suggestion with a savvy accountant to see what the short and long term benefits and issues are.
Derek
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brahms
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@brahms
Join Date: 2004
Post Count: 485
February 9, 2005 - 2:26 pm
your right of course, as you have suggested, why indeed would the ato be concerned..
cheers
brahms
CALL NOW…adults only (boys and girls ask mummy or dad first) ~~ 1900 hot broker ~~
pfsfinance
Member
@pfsfinance
Join Date: 2004
Post Count: 171
February 9, 2005 - 2:40 pm
This is what my sister & her husband have done ovr the years.
First property was purchased in husbands name only. (this was before they got together)Husbnd lived in property.
When they purchased 2nd property in both names as ppor, 1st property was then sold to my sister by her husband at market value at the time. (she had to pay full stamp duty)
When they purchased 3rd property in both names as ppor, 2nd property was then sold to the husband at market value at the time. (full stamp dutyagain)
They have had no problems from the ato as everything was done properly with market values on contracts and full stamp duty being paid.
Financial Wellbeing Coach
W: http://www.pfsfinance.com.au
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crj
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@crj
Join Date: 2004
Post Count: 618
February 9, 2005 - 10:40 pm
No problem, it’s done quite commonly and your reason for doing it is not just the tax advantage, but to build up assets etc.
Just bear in mind as 84K is currently owing that if the house is worth 400k, the amount you will end up with is 158k (200k – 42k)