All Topics / Legal & Accounting / Joint Tenant .vs Tenant in Common

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  • Profile photo of neilharrison_253neilharrison_253
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    @neilharrison_253
    Join Date: 2013
    Post Count: 33
    October 29, 2014 - 4:28 pm

    Hi All

    I am just about to settle on a piece of land to build our PPOR which may or may not become a future IP. I’m looking to get the initial structure setup correctly from day one and leaning towards Tenants in Common as i can adjust the % split between us depending on future income levels. My question is I don’t know what i don’t know so unsure if I am missing something else I should be asking or are there more benefits to being Tenants in Common?

    Thanks in Advance

    Neil

    Profile photo of CatalystCatalyst
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    @catalyst
    Join Date: 2008
    Post Count: 1,404
    October 29, 2014 - 6:16 pm

    You can’t just change the % ad hoc.

    The % you choose when you buy is the % it is. Any change will mean paying stamp duty etc to change it.

    It would be nice if you could do it but it’s called Tax Avoidance which is illegal.

    The only difference therefore is if you want your other half not to get your half if you die.

    Profile photo of neilharrison_253neilharrison_253
    Participant
    @neilharrison_253
    Join Date: 2013
    Post Count: 33
    October 29, 2014 - 9:13 pm

    Hi Catalyst

    Thanks for the response. I was not aware the % was not adjustable so thanks for the heads up. Is there any thing else you can think of that I may be missing? Pros and Cons between each one?

    Thanks

    Neil

    Profile photo of Richard TaylorRichard Taylor
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    @qlds007
    Join Date: 2003
    Post Count: 12,024
    October 31, 2014 - 12:03 am

    Certainly in Qld there would have been better ways around it to avoid such issues but of course too late now.

    Cheers

    Yours in Finance

    Richard Taylor | Australia's leading private lender

    Profile photo of neilharrison_253neilharrison_253
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    @neilharrison_253
    Join Date: 2013
    Post Count: 33
    October 31, 2014 - 11:09 am

    Hi Richard

    Am unsure i fully understand your comment. The only two options are Joint Tenant or Tenant in Common neither of which have been chosen yet so unsure why it’s too late now?

    Regards

    Neil

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024
    October 31, 2014 - 10:43 pm

    Sorry Neil that is not correct other options are available.

    You stated you are “just about to settle” and if this is the case it us too late.

    Cheers

    Yours in Finance

    Richard Taylor | Australia's leading private lender

    Profile photo of neilharrison_253neilharrison_253
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    @neilharrison_253
    Join Date: 2013
    Post Count: 33
    November 1, 2014 - 7:50 am

    Hi Richard

    True, I have two weeks before settlement so hard to change things now but out of interest and curiosity what would be the other options? Are there better options and if so why / what makes them better?

    Regards

    Neil

    Profile photo of TerrywTerryw
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    @terryw
    Join Date: 2001
    Post Count: 16,213
    November 1, 2014 - 9:52 pm

    I have written about this topic in my last 3 newsletters. http://www.loan-experts.com.au/article/

    First you have to consider whether you should jointly own property together. There are many reasons not to, and some reasons to.

    If joint ownership then consider whether equal or unequal shares.

    I generally favour TIC as
    1. Each party can leave their share via their will, and
    2. Bankruptcy of one spouse during or after the death of a joint tenant means the whole house will be lost and not half.

    Plan ahead and there are some tax strategies available too.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of neilharrison_253neilharrison_253
    Participant
    @neilharrison_253
    Join Date: 2013
    Post Count: 33
    November 2, 2014 - 9:10 pm

    Hi Terry

    Thanks for the response. It is greatly appreciated. As this is a PPOR i has not put much thought into the structure as i would of had it been a IP but just goes to show you need just as much thought.

    Regards

    Neil Harrison

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