my husband and I recently bought 2 investment properties in both our names. my husband earns most of the money and with my income I paid only around $200 in tax. I just did my tax return and was told that as the property is in both our names that the negative gearing that went against the properties for tax was split in 2. therefore we missed out on thousands of tax write offs.
I am wondering how I would go about taking my name off the investment properties so that we can get maximum tax benefits.
thanks(I live in south Australia)
You can change it but you will most likely pay stamp duty on 50% of the market value of the properties. In some states you can transfer between spouses but that's usually a PPOR not so you can avoid tax (it's called tax avoidance).
Not talking to your accountant before buying is a big mistake lots of people make.
Think about the future though. If it is in your husbands name only he can claim the losses, but what about when you sell. ALL the CG will go on his tax also making a huge tax bill.
What are your plans for the properties? What about when they become cash flow positive. That will be a huge tax bill also on your husbands wage.
Speak to your accountant based on your individual circumstances and the status of the properties.
As Catalyst mentioned you can "sell" your share to him, I'm not sure of the rules in SA but it will most likely incur stamp duty costs and there might also be some CGT to pay on your behalf when selling if the investments have increased in value since you bought it.
Do the numbers first before you decide to do anything.
Cheers
Tom
You may live in SA, but where are the investment properties? If in Vic you could transfer without stamp duty.
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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