Should my wife buy it or me? Or Both?
I am the sole earner for our family (75k) and we are about to put in an offer on a house which we can buy using the equity in our PPOR. We don’t have to borrow any money against the IP and it will be cash flow positive.
Should I put down my wife only on the O&A so that any income earnt from it won’t be taxed?
Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional.
What are your plans for this property?
Simplistic advice says that if you are buying it to hold forever and it is pos geared then the lower income earner is best. This would also be the case if you wish to realise a capital gain.
But things are never simple and you probably need to speak to your accountant.
Simon Macks
Residential and Commercial Finance Broker
[email protected]
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.
Look at a discretionary trust too – for asset protection and flexibility.
Terryw
Discover Home Loans
Parramatta
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Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
I’m in the same situation. I elected to use a HDT. This was for several reasons.
1. I could divert the income to myself or my husband depending on circumstances. You might know your circumstances now. But what happens 5 years down the track if you decide to work less or your partner gets a higher paying job.
2. If I use a HDT I can get a LOC on our PPOR under my name then buy units in the HDT. This allows me to claim interest on my tax return as the highest income erner (although I do have to give myself income to offset some of this I can effectively negatively gear myself).
A HDT should only costs you between $300-$500 to set up but for me the flexibility it gave me was invaluable. Definately check with your accountant to see what is best for you (also make sure your accountant is experienced in property investing – that makes the world of difference and not all accountants are!)
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