Hi all. Recently i was at a lender organising a loan approval for a investment property i am about to buy.I wanted the loan in my name as i am earning approx double what my wife does and therefore pay more tax. And wanted the negative gearing to be wholy on my wage to get a better tax return.The lender then said it dosnt matter that its in both names and said it not how the money is borrowed its how it is used. I questioned this but he was 100% certain having covered the subject recently with a tax accountant.HeSaid the loan can be in both names and i can still use the negative gearing potential on my wage alone. He even reverenced the ruling in the relevant tax documents.By the way he was a financial adviser(Manager) not someone behind a counter.Can someone back up these claims as it sounds strange to me and i dont want to get caught out.
Hi devo,
He’s right, it doesn’t matter where the money comes from but who owns the property.
regards
ross
Hi devo,
He’s right, it doesn’t matter where the money comes from but who owns the property.
regards
ross
Ok so it is ok for both my wifes and my name to be on the loan application but what about the contract for the sale of the property. They asked for her name to be on there as well.Does that mean she is buying it as well and therefore tax minimisation must be from both our wages.???
By the way my offer on a ip was excepted today so im on my way. But if any one can answer my question above about my wifes name on the sale contract it would help me out heaps.[biggrin]
Ownership = Names on the title. You can have 50/50 or some people have 99/1 with the 99% being in the name of the person with the highest income.
Some lenders also allow the title to be in one name but the loan in two names for married couples.
But think carefully before you sign on the dotted line. Short term thinking may save you a few hundred dollars in tax now, but could end up costing tens of thousands later in extra capital gains tax.
you could also look at using a trust structure to get the best of both.
Terryw
Discover Home Loans
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Send an email to get my newsletter.Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Terry is right too often lenders are keen to have both of on the title when there is absolutely no need for this.
Consider a HDT structure so you have the best of both worlds in both asset protection and taxable benefits. One consideration is the date of the contract as the HDT would need to be dated prior to this.
Also before you sign on the dotted line make sure that they havent crossed collateralised the loan. Lenders love to do this.
Cheers
Richard Taylor
Residential & Commercial Finance Broker.
Licensed Financial Planner. Ph: 07 3720 1888
[email protected]
Looking for life cover – We Guarantee to beat any quote you have in writing.Richard Taylor | Australia's leading private lender
Thanks guys. Cleared it up today.Both names on loan but only mine on the sale contract.I understand that this way i will pay more capital gain but my goal at this stage is to minimise tax.We may have children down the track so dropping back to one wage may be a struggle without the tax break helping repayments.I fixed the loan for 5 years. Which should see our current home payed off and hopefully some capital gain on the investment. I am actually thinking of my next purchase even though contracts have not being sighned on this one. im getting the bug.
Hi,
So I have worked out two names on the loan and one name on title is OK.
I have bought a property already (investment) so am not eligble for the first home owner’s stamp duty concession though my partner (un-married) is.
If we are both on loan but only she on title can someone tell me:
1) If I transfer onto the title later on, does it create the same stamp duty effect as if I had been on title from the start
2) I read somewhere about a concession on transfer of title on a principal place of residence, can anyone shed more light on this?
Thanks in advance
just new to this site but pretty sure that as long as it is an investment property only it will not preclude you from getting the first home buyers grant/ stamp duty concessions when you purchase your own home.
Hi,
Not sure about other states, but in NSW, the OSR states this (regarding Stamp Duty Concessions):
Point 4 is the relevant point.
First Home Plus transfer and mortgage duty exemptions or concessions are available if you are buying or building your first home (valued up to $600,000) or buying vacant land on which you intend to build your home (valued up to $450,000), and who meet the following eligibility criteria:
* Each applicant is a natural person and not a company or trust.
* At least one applicant is a permanent resident or Australian citizen.
* Each applicant must be at least 18 years of age.
* None of the applicants or their spouse/de facto have ever owned a residential property in any State or Territory within Australia (either solely or with someone else). Residential property also includes investment properties.
* None of the applicants or their spouse/de facto have previously been party to an approved First Home Plus application.
* All applicants buying the property must occupy the home as their principal place of residence for a continuous period of six months, commencing within 12 months of completion of the agreement.Does anyone know about the situation with transfer of title after purchase?
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