Each would pay tax

Normally you wouldn’t want to buy in a company name because of the tax rate. But there can be benefits especially in NSW as a company will get a separate land tax threshold. A company could also retain income so cap the tax at 30%, but this may be better done with a trust and a bucket company.

Keep in mind that franking credits are decreased by depreciation so this is another disadvantage.

If she is the shareholder the company could pay dividends and she could pay the extra tax, if any, and then buy in her own name.

The company could lend her money to buy, but then Div7A would apply and she would need to consider the interest rate and terms carefully.

The company could lend another company money to buy – but then if she lives in it Div7A would apply as well.

If she had loaned money to the company originally the company could repay this loan.

All the above have various consequences which need advice on.

Yes, CBA will

How much higher would you be paying on fixed rates compared to variable?
How many rate rises would it take for you to be ahead?

1. You would need to transfer title. Which state is the property in?
2. If you want the interest to be deductible, which you probably would, you wife would actually have to purchase part of the property from you and to borrow to do so. Just adding her to the loan will result in losing deductibility. You could have all the loan in her name with you as guarantor – but what is the point of doing this? She could only claim the interest on her share of the ownership of the property and you couldn’t claim any.
3. If a trustee purchases the property it can get a loan and you can guarantee this loan if you are a director of the trustee.

Generally it is not a problem and can result in some good rates, but there is a risk.

Most loan agreements have ‘all moneys’ clauses which mean that any security you have with the bank will be used to secure all debts you owe to that bank, whether now or in the future.

So if you get into trouble you may come down quicker than if you had your loans with different lenders.

Costs incurred before legal ownership can be deductible if you intend to keep the property to rent out. Its like borrowing to pay the deposit on an off the plan property – this interest could be deductible.

Get some tax advice on ‘withholding tax’ – otherwise you won’t be able to claim any interest if you do not withhold tax. There may be an exemption for double tax agreement countries though.

You need receipts! Tax invoices