All Topics / Legal & Accounting / % ownership of IP
Firstly, thanks to all those people who responded to my “sell or rent it out” post. I did post a thankyou but it got lost because I wasn’t logged in when I sent it [angry2]
When we took out our loan for our investment property I took it out in both my wife’s and my name so that we both had ownership of the property. I now believe this was a huge mistake, contrary to what I was told. I was told that I could change the ownership to 99% me, 1% my wife by signing some type of declaration. My accountant now tells me that I can’t do this. This means that because I am the only one working, I can only claim 50% of the expenses on it. Both our names are also on the title. Have I made a huge mistake or is there someway out of this?
thanks,
Richard.
Hi Arky,
I assume the property is in your home state of Victoria, as such I understand that it is possible to transfer property between spouses without incuring stamp duty. Now this opportunity may only exist when a PPOR is involved and may not extend to an investment property.
On this matter I suggest that you contact the Vic Office of State Revenue (or whatever it is called in Vic)
Buying your wife’s share off her is also a possibility – this will mean that your wife will incur CGT for the sale of her share but it might be worth considering.
I suggest you ask your accountant ‘how can I get to own the greater share of this property?’ – if they cannot answer of give options look elsewhere.
Please note I am not an accountant but you would also need to consider the costs V benefits of such a transference from a short and long term perspective – this is where a good accountant is critical.
Derek
[email protected]
http://www.pis.theinvestorsclub.com.au
0409 882 958Thanks Derek,
Yes, the property is in Victoria. I actually contacted the ATO and the only way I can claim 100% is to:
Buy my wife’s share but she will need to pay CGT as you mentioned. I guess the question is, if she doesn’t have an income, and CGT is based on your taxable income, does she pay any CGT at all?
The accountant I chose is crap, even though he claims to know about property.
Does anyone know of a good accountant in Melbourne who owns their own IP?
I guess the positive out of this is that if I can’t change ownership easily and without too much cost, is that if my wife still isn’t working when we sell the property, the CGT we will pay is reduced and not based solely on my income.
thanks,
Richard.
Hi Arky,
If your wife does sell a property any gains made are added to her taxable income. So, if she isn’t earning anything then her sole taxable income is the gains made.
Furthermore if she has held the property for more then 12 months and 1 day (contract signing dates not sale dates) then she would only be taxed on half the gain.
Dale Gatherum Goss is a very cluey accountant – http://www.gatherumgoss.com. I am sure there are others.
Derek
[email protected]
http://www.pis.theinvestorsclub.com.au
0409 882 958Also consider what will happen in the future. You may gain some extra money now by saving tax, but in a few years you will be paying extra tax when the property becomes cashflow positive. And even worse, he you were to sell you would have to wear the whole capital gain yourself.
Terryw
Discover Home Loans
Mortgage Broker
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
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