I think divorce is the only way, but it may be a bit dramatic to divorce because of this – depending on how much the property is worth i guess.

But are you thinking long term? The property will only be returning a loss for a few years. As rents rise, it will start making a profit. Then if it is owned by the high income earner then you will be paying even more tax.

One more thing. If it is an investment now and has equity, then transferring it may allow you to increase the loan and have this deductible, but apply the increase (proceeds from your sale) to your own home loan.

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One of my real estate friends said he sold a house that was empty. The purchaser came over to the office a few days later and asked for the keys as he wanted to check something. A few days passed and the agent drove by the property to find the new owner had just copied the key and moved in, without permission, approx 5 weeks too early!

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Toni, it would depend on the wording of the deed. Most allow for capital gains to be distributed to any beneficiary. The beneificary would then have to declare the capital gain in their income as a capital gain.

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Mancityfan

Equitable interest means someone has an interest (ownership) in the property, but there name isn’t on the title. There would usually be a contract, but maybe not always. Some ways you could get equitable interest include – marriage, defacto, purchase an option, mortgage, inheritance, being a beneficiary in a trust that owns the property etc.

Elka, an option can be anything. But usually, from what i have seen around 1-2% of value of the property.

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Don’t know about that Grant. I see what you mean, if someone lent you money, you would probably need to get it a bit in advance and then use it. Where do you put it in the meantime?

Better talk to your accountant about this one.

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I would say no to that.

If you take money from a LOC you are borrowing. Deductibility depends on what you have borrowed for. In this case you would have borrowed to pay money into a savings account.

You have to be careful about moving money around. I remember reading a case where the person increased their loan, and put the money into a savings account. They then used that money for investment, but the money was not deductible. The money was borrowed to place into a savings account. Putting it in there removed the connection to the borrowing and the investment purpose

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I have never heard of that ‘rule’. I have helped clients purchase apartments/units with 95% loans many times.

BTW, what is the difference between an apartment and a unit?

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I beleive so in both cases, unless you go through a divorce. May vary from state to state.

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Once you own a property, it is too late to transfer it to a trust. To get it in a trust, you must sell it to the trust. if you sell, then there is CGT and Stamp duty (not sales duty).

If you are planning on buying and selling, you might want to do one and then see how it goes.

I have seen many people with big plans who have formed trusts, then never used them. Things change, sometimes it is harder than expected, or family problems etc and no more are done.

On the otherhand, having a trust for the first one could save you thousands in tax, which should make up for the set up costs.

You will also have land tax and running costs.

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It will probably depend on how many deals you are going to do. If not sure, may be do one in your own name and see how you go. If intending to do many, then you will need a trust anyway, so why not get it right from the begining. Costs about $2000 to set it up with some advice.

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