All Topics / Legal & Accounting / Transfer of title and mortgage – Getting married

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  • Profile photo of OR1ONOR1ON
    Member
    @or1on
    Join Date: 2009
    Post Count: 10

    My fiance currently has an investment property in which her name and her fathers are on the title (father is the guarantor of the mortgage too)

    Upon marriage, we are looking at getting another property as I have yet to take out a mortgage.

    Is it best to leave the title and mortgage under my fiance and her fathers name when we're married and to get a mortgage and title for the new place in my own name?

    Could anyone please advise what possible scenarios we would face and what the implicatons (CGT, Stamp Duty etc) would be if we did decide to transfer the title of her investment property and the mortgage into my name and her name?

    Thanks

    Profile photo of crjcrj
    Participant
    @crj
    Join Date: 2004
    Post Count: 618

    From my reading of your post:

    a. your fiancee's IP is in her name and her father's.  If this is correct, how is the rent being shown in their tax?  If her father is showing rental income from the property then if he transfers his share in the property there will be CGT consequences unless he has previously, say at the time of purchase, entered into a contract to sell his share.  What shares do they hold the property in?

    b. if you get a second place, is this going to be a PPOR or an IP.  If an IP, the ownership will depend on yours and your fiancee's financial situations and plans.  eg if the property will be negatively geared it may be best to be in the name of the highest earner, but if you think it is going to rise in value and your fiancee is going to take time off work for children in say 5 years and you intend to sell it when she is not earning other income maybe it should be in her name. 

      

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213

    In most states it is possible to add a spouse to a title without stamp duty, but this is usually only for owner occupied properties sp probably won't apply. So you would be buying the dad out, basically, if you want him off and you on. This means stamp duty for you and CGT, possibly, for the dad. Also legal fees and loan exit and app fees again..

    Probably best to consider leaving it as is and working out how to get at the equity. This can be complicated because of the thrid party. You don't want to cross collateralise the next one with this one in any way. So best to wife and dad get a LOC and lend you the deposit for the next purchase. Then you get a 80% LVR loan on its own. You can work out what names for the next one, which will vary depending on your situation. MAybe look at using a trust 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 madelizabethanmadelizabethan
    Member
    @madelizabethan
    Join Date: 2005
    Post Count: 28

    It sounds to me as though you’re missing one vital thing here: You’re yet to take out a mortgage.

    If you’re hell-bent on buying another property, you would do well to consider getting your own on the FHOG, and then transferring it into both of your names after the first 12 months are up. If you’re able to do that right now!

    Profile photo of wisepearlwisepearl
    Member
    @wisepearl
    Join Date: 2009
    Post Count: 264
    madelizabethan wrote:
    It sounds to me as though you're missing one vital thing here: You're yet to take out a mortgage. If you're hell-bent on buying another property, you would do well to consider getting your own on the FHOG, and then transferring it into both of your names after the first 12 months are up. If you're able to do that right now!

    Definitely consider the FHOG, BUT as far as I'm aware once you are married, if your spouse has a property in her name it will make you ineligible.

    I am looking into this at the moment, as I own property but my partner does not yet. We are thinking he should purchase our new PPoR in his own name solely, receive the FHOG and do this before getting married. The grant may be "only" $7000, but the real benefit is the stamp duty exemptions (and I think that varies from state to state as well).

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213

    Spouse is defined as defacto you are living with

    FIRST HOME OWNER GRANT ACT 2000 – SECT 6

    Spouses

    6 Spouses

    (1) A person is the "spouse" of another person if, on the commencement date of the eligible transaction:

    (a) they are legally married, or

    (b) they are living together as a couple in a de facto relationship within the meaning of the Property (Relationships) Act 1984 .

    (2) A person to whom an applicant for a first home owner grant is legally married is not to be regarded as the applicant’s spouse if the Chief Commissioner is satisfied that:

    (a) the applicant was not cohabiting with the person on the commencement date of the eligible transaction, and

    (b) at the time of deciding the application, the applicant is not cohabiting with the person and has no intention of resuming cohabitation.

    PROPERTY (RELATIONSHIPS) ACT 1984 – SECT 3

    Definitions

    3 Definitions

    (1) In this Act, except in so far as the context or subject-matter otherwise indicates or requires:
    "adult person" means a person of or above the age of 18 years.
    "applicant" includes a cross-applicant.
    "appointed day" means the day appointed and notified under section 2 (2).
    "de facto relationship" -see section 4.
    "domestic relationship" -see section 5.
    "financial resources", in relation to parties to a domestic relationship or either of them, includes:

    (a) a prospective claim or entitlement in respect of a scheme, fund or arrangement under which superannuation, retirement or similar benefits are provided,

    (b) property which, pursuant to the provisions of a discretionary trust, may become vested in or used or applied in or towards the purposes of the parties to the relationship or either of them,

    (c) property, the alienation or disposition of which is wholly or partly under the control of the parties to the relationship or either of them and which is lawfully capable of being used or applied by or on behalf of the parties to the relationship or either of them in or towards their or his or her own purposes, and

    (d) any other valuable benefit.

    "property", in relation to parties to a domestic relationship or either of them, includes real and personal property and any estate or interest (whether a present, future or contingent estate or interest) in real or personal property, and money, and any debt, and any cause of action for damages (including damages for personal injury), and any other chose in action, and any right with respect to property.
    "regulation" means a regulation made under this Act.
    "Supreme Court" means the Supreme Court of New South Wales.

    (3) A reference in this Act to periodic maintenance is a reference to maintenance paid or payable or to be paid, as the case may require, by means of a weekly, fortnightly, monthly, yearly or other periodic sum.

    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 TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213

    BTW, the above is for NSW only, but other states would be very similar

    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

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