Hi
I purchased my first IP about a year and a half ago. We got the first home owners grant (it was to good to pass up at the time) so we moved into the property after about 6 months untill now (12 months total).
We were advised to put the place in both my wife and my name because it makes it look more like a PPOR than putting it under a single name.We are now renting and in the process of getting our PPOR and want to know if i should change the name on my IP to my name only and put the PPOR under my wife? Am i able to change the name without a cost?
My understanding is that this will help if legal action is take against the IP because the PPOR will not be mine so it is not linked at all to the IP. Is this correct?Regards
chrisDepending on what state you are in, there may be a stamp duty cost.
Personally, I wouldn't bother. That's just my opinion, and I'm sure others will have differing opinions. My wife and I have both our PPOR and IP in joint names.
Its a lot of mucking around to change title. There will probably be stamp duty (tho may be exempt in Vic) and there will be CGT issues if it has been a rental. But by buying out a partner you may be able to free up some equity and use that towards the new property which will be more tax effective.
Generally it is good to hold property separately for asset protection reasons – if one of you goes down you won't lose everything. But since you already own the property there will be bankrupcty Act issues. If you transfer property with the aim to defeat creditors then the sale can be reversed if you go bankrupt – I think there is no time limit if it was done with the intention to defeat. If there is no intention, then the sale can still be reversed for up to 5 years.
So changing names may not reduce your risk
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
Just get your future IPs set up the way you need to – consult your accountant and solicitor to tailor a solution to your requirements.
Thanks guys for the feedback.
It sounds like i may just have to leave the property the way it is for now.
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