Does anyone have any experience in ‘personal agreements’ on property ownership, whereby one buys a property in one’s own name and then lets another person ‘buy in’ unofficially (ie the title is in one name only).
Would it be correct to assume that once established as a principal residence, I (the property title holder) could then rent it out for the maximum period of time not having to pay CGT (5-6 years from memory) without the unofficial owner having to be involved in CGT implications for any reason.
So when I go to sell the property at the end of the day, I could split the sale price between myself and the other person, neither of us being required to pay CGT, event though only I lived in the property initially.
The ATO has verbally told me that the ‘silent partner’ of a personal agreements over property ownership is not considered in the taxation implicaitons of the property, rental or not…
Wouldnt this be classed as a “Lease Option” or a “Wrap”. Where the tenant is paying a lease to you, in the intent to buy. The leasee would be paying ~2% higher interest than the bank loan that you are managing.. etc….
As you can tell, i havent explored Wraps/Lease Agreements yet.. thats in the “when I have experience” in Buy and Holds, that will be the next step of complexity.
There is a category for Wraps in this forum too.
[
]Regards,
Arty.[
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“Why work to the age where you cant enjoy
what you have worked for !.” (Author: Me)Ask your accountant about structuring. With this I mean setting up a Hybrid Discretionary Trust. This allows you to disperse any moneys to whoever you make a Benneficiary, including yourself.
Expand your context. Think outside of the norm. Ask some questions. Ring a few solicitors who are property lawyers. Ask them for advise with trusts. Write down a few question then ask them for advise. Yes solicitors advise is free until you make an appointment. You’ll be surprised to here what they have to say when you ask, “Can you help?” “How is the best way to go about setting up that kind of structure?” “Can you give me a name of an accountant you work hand in hand with?”
At some stage you will have to pay for professional advice.
Don’t step over dollars to pick up dimes!
A solicitor can save you thousands in the long term. Say if you wish to transfer your property to your son, or wife, or brother later instead of selling. You can do that with Trusts without paying Stamp Duty. You can’t do that if the property is under your name.
Best Wishes for your journey!
Cheers! Nathan [
]Unless you intend occupying the property for a specific period of time, you’ll have to pay CGT. And if this property does draw a CG and you do have to pay a CGT, ain’t you worried the other party won’t just say bad luck, since your the official owner you’ll have to pay this tax ?
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