Tim,

You are right. Everyone should get tax advice from a lawyer and/or accountant.

But have a look at ATO ID 2001/79
http://law.ato.gov.au/atolaw/view.htm?docid=AID/AID200179/00001

Issue

Whether interest on funds borrowed to acquire the share of the taxpayer's spouse (the spouse) in a property, to be kept for investment purposes is deductible.

Decision

The interest is deductible under section 8-1 to the extent that the borrowed funds are used for the purposes of producing assessable income.

—

But the ATO could still apply Part IVA

No. But that is a good idea too. You should consider life insurance

You need to hold the asset in the low risk name so if the high risk person goes bankrupt there is less chance of losing the house.

This all comes in the planning on how you operate the system.

The bank has a duty to the owner to get the best price possible for them or they could be held liable. Therefore they will want 'market value'. This is usally achieved by going to auction – which is properly advertsied and held.

Also, if the property has been repossessed then they would have been considerably behind in their loan, add on the expenses and legal fees and it could be a fair bit higher than what they paid for the property.

You might also find it hard to negotiate with a bank.

nope. An individual has a land tax free threshold of about $380,000 where they pay no land tax.

Some other disadvantages are no negative gearing.

I would probably suggest you look at using a fixed trust with the units held personally. Later on you can transfer the units to a discretionary trust. This will add great flexibility, but will come at a price as:
– more complex
– more costly to set up and maintain
– harder to get finance

But it is so much more flexible – you may even be able to transfer the units to your SMSF on retirement. Once there the property could be CGT free and income tax free

Searches have to be ordered and received back. Sometimes there are hiccups here. For the outgoing mortgagee to be ready for discharge takes at least 2 weeks too.

42 days from today is about the 21 Dec. You are cutting it very fine (in NSW anyway). Just remember that everyone wants to settle before Christmas and the banks are overloaded with trying to get paper work out etc. Its teh most hectic time of year for this. Try for a 30 day settlement maybe.

I can think of one indirect way a trust can help.

Say you had set up a few properties purchased under a trust structure. You kept you spouse out of it completely except for being a beneficiary. After a few years your spouse has been getting income from the trust. She/he could then use this income to demonstrate to a bank their own ability to pay a loan.

This could also be achieved by buying jointly or by setting up trusts jointly. But the difference here is that they would be on the loan or guaranteeing the loan whereas in the above structure they wouldn't.

Bloody hell, the formatting changes when posted
have a look at http://www.austlii.edu.au/au/legis/nsw/consol_act/ia1987191/s21c.html

Note, it doesn't say anything specific about time. Just that the duration of the relationship can be taken into account

I was curious so looked it up for NSW

Spouse is defined at s 6

FIRST HOME OWNER GRANT ACT 2000

http://www.austlii.edu.au/au/legis/nsw/consol_act/fhoga2000250/s6.html

basiclally if includes some you are legally married to or de facto to.

for the meaning of defacto it sends you over to the Acts Interpretation Act, s 21
http://www.austlii.edu.au/au/legis/nsw/consol_act/ia1987191/s21c.html

(2) Meaning of “de facto relationship” For the purposes of any Act or instrument, a person is in a "de facto relationship" with another person if:

(a) they have a relationship as a couple living together, and

(b) they are not married to one another or related by family.

(3) Determination of “relationship as a couple” In determining whether 2 persons have a relationship as a couple for the purposes of subsection (2), all the circumstances of the relationship are to be taken into account, including any of the following matters that are relevant in a particular case:

(a) the duration of the relationship,

(b) the nature and extent of their common residence,

(c) whether a sexual relationship exists,

(d) the degree of financial dependence or interdependence, and any arrangements for financial support, between them,

(e) the ownership, use and acquisition of property,

(f) the degree of mutual commitment to a shared life,

(g) the care and support of children,

(h) the performance of household duties,

(i) the reputation and public aspects of the relationship.

No particular finding in relation to any of those matters is necessary in determining whether 2 persons have a relationship as a couple.

Possibly not cgt on transfer if main residence dont think any stamp duty concessions in act unless the transfer occurs because of breakdown in relationship