Buy in own names is still a good 'structure' that works for most people. I specialise in 'structures' and advise most people not to use a trust. BUT depending on the circumstances it could be a good idea to use a trust or a company or a SMSF. All depends on a number of factors.

BTW, trusts don't help you borrow more either.

If you can service, come up with a deposit and have clean credit then generally no probs to get many loans approved. Tonight I am working on 4 for a client who already has 3 in the past 12 months – for example.

For tax purposes just consider A and B each own different properties.

If A is living in it A could claim it as the main residence-usually anyway.

If B is not living in it then B could not claim it as the main residence.

If B is not getting market rent then no deductions.

If sold B would pay CGT on the profits, but this may be able to be reduced with costs not otherwise claimed – such as interest.

Consider also whether they own it tenants in common or joint tenants.

What if A dies?

What if B dies?

Could A will their share to C? If A died it could be B and C who end up owning – does B know C? What about D? D is C's spouse and they are separating and D put a caveat on title because E told her to. E is D's defacto partner. But E is still married to F. E and F had children but it turned out that G was the father. H was the surrogate mother…

Doesn't work like that. The offset account is savings and can be drawn anytime.

If you don't have enough equity you may have to pay the offset into the loan and then reborrow it.

Rather risky I think. What if you forget to exercise the option on time – if your exercise is ineffective or defective. Plenty of cases where this has happened.

I am sure Jamie would like to talk to you, but if you are going to go ahead with someone else then don't waste his time.

If it is one title then you would need to apportion your loans accordingly. ie. you can't artificially have all the debt on the investment portion and none of the other portion.

Check with your accountant about deductibility of interest.

And banks split loans all the time so you shouldn't have a trouble from this end.

You could split the loan on purchase. But you couldn't attribute more than a fair split to the investment portion.

Why a LOC on the property? This could be dangerous.

I agree with Shape – doesn't really work in practice. Personal loan will be short term, high rates and PI. It will hurt serviceability. It will also be hard to find a lender – not impossible though.

getting a quick and higher revaluation is also not easy.

Slow down there!

There are a few issues here.

Firstly you could sell your half to your wife – but many complicated and costly issues.

But things might not be that bad.

At the moment you have created a mixed loan – most probably non deductible as it related to the purchase of the house which is owner occupied. This interest may be deductible once you move out and rent it.

The other part was money borrowed for the new IP so this portion should be deductible.

But the problem is you are probably paying PI and it is a mixed loan so that would make it hard to apportion.

I would advise you to immediately convert the loan to IO and maybe even consider splitting into 2 – the redrawn portion used for the investment and the rest. Have the offset account set up on the non deductible portion and problem almost solved.

Then when you move out asses whether you would be better off selling it to your wife.