My wife an I are looking into buying our first PI and would like to know if there are tax benefits just having the loan in one name instead of a joint loan?
The benefits are more from having the property in the right names. Typically a negative geared property is more effective in the higher income earners name and a pos geared property vice versa.
You really should discuss this with your taxation professional.
Cheers,
Simon Macks
Finance Broker
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0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Don’t forget that negative geared properties eventually become positively geared, so you could end up paying more tax if you purchase in the high income earner’s name.
Also there are pitfalls if you have a high capital gain and have to sell, there could be a huge capital gain which would have to go onto of the high income earners other income = a lot of tax!
Terryw
Discover Home Loans
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
Using an offset account and continuing to invest using the capital gains if holding the property long term would stem any chance of the property becoming positive. The offset will allow you to reduce debt and expenses as required and vice versa.
The Mortgage Adviser
http://www.themortgageadviser.com.au
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Essential LinksYou need to consider carefully your current and future income of both parties and whether the property is +ve or -ve geared.
For example, if your partner is planning to cease work to stay home with the kids, and will have no income for the next 5 years, and the property is +v cash flow then having it in her name only is more advantageous tax wise.
By contrast, in the same scenario, the property is -vely geared then you would benefit from it being in your name only, as she would merely be carrying forward tax losses against no income.
No standard answers here I’m afraid.
Regards
AllyDon’t confuse these 2 issues
1) name on the title
2) name on the loanIt is #1 that determines who receives the income & deductions on the property, not #2. Sometimes what may happen is that the highest income earner has their name on the title to maximise deductability, and their and their partners name are both on the loan for servicability reasons.
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