We bought the house where we live in both our names (husband and I). Last year we put down an offer (also with both names on the offer) on an off-plan apartment that is due to settle at the end of this year so we will need to sort finance for it.
Also looking to buy another investment property soon, something positively geared this time. My husband is on the highest tax threshold and I earned $38000 last year, so much lower tax bracket. We were on a 457 visa (considered Non-resident), but got our Permanent residence a month ago, so now we have the freedom to buy used property!1) did we do the right thing having both our names on the offer for that off-plan apartment, and could that still be changed to just my husband’s name if that’s more advantageous tax wise when we get a bank loan (or can we have the title in both our names and finance in just one name?)
2) for further property investments would it be better to just have the offer and finance in husband’s name due to higher tax bracket, or ok to have both names and when we sell property the tax payable will be shared 50/50 in high and low tax bracket?
3) From what I read in Steve’s book the best strategy is to form a Trust, but that might be too late for us already having two properties in our names?
Hope someone can help, being a bit of a green thumb at property investing.
Thanks, SamiHi again, anyone has any insight into this?
1. Wouldn’t have advise that you do it like you did. You are both exposed by going on the contract jointly. OTP is very risky and if you cannot settle you will both be sued. You could have done the contract in one name and then settled with 2 on title or 1. More flexibile and less risk.
All owners need to be on the loan, but where 1 owns both spouses can be on the loan (with some banks).
2. Consider saving tax now v paying more later. There should be a profit at some point.
3. Forming a trust may not be the way to go, especially where land tax will apply and where there will be a loss. but if suitable future purchases could be made via atrust.
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
Which State(s) are the properties in Sami? In Victoria you can transfer titles between spouses without incurring stamp duty, this is not the case everywhere but you may be able to restructure ownership as you wish.
Regards
Thanks for your advice Terry.
The properties are in WA. Thanks Alistair
in WA transfers can be made without duty where the property goes from 1 spouse to both spouses equally if the property is the main residence.
Plan ahead for some strategies.
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
Thanks Terry. Not the case as the Off the plan property will be used for investment.
If off the plan you have the ability to settle in different names than the contract and do so without extra stamp duty. get advice on s42 Duties act wa.
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
You absolutely should get some legal advice re the settlement and see if you can optimize your ownership and loan structure.
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