Hello
A friend couple of mine want to buy a apartment for investment purpose.
But they not sure about whether to put both of their names under the property or just one of them.Any benefit for tax purpose? one partner is earning a small wage
Cheers
If they both 'own' the property then both names should be on the title.
If there is a huge difference in income levels and contributions being made towards the property then a tenants in common arrangement with unequal ownership ratios may be suitable.
End of the day they are buying the property together and having both names on the title is fundamental – it provides greater protection should the relationship end.
Thanks for the reply,
they not worrying about relationship part, they just want to know for tax claim purpose which way is better
Cheers
Not all relationships stand the test – this to me is a greater worry.
But – tenants in common is often used to weight ownership so higher income can access more claims this helping with the tax situation.
Weighting ownership (for example to 75/25 split) means the person with 75% ownership gets to claim 75% of all costs but must also declare 75% of all rental income. If the property is negatively geared then the person with the higher income (if they are in different tax brackets) should have higher ownership.
If the property is positively geared then the person with the lower income should have higher ownership.
Adding to Derek's comments above they maybe better off not buying in personal names at all and looking at Buying In Trust.
The decision will be based around the property and the returns / losses it generarates both now and in the future and also their own personal financial position. Many a client buys in a negatively geared property in Trust because they believe that within 2 years the property will produce positive income.
Horses for courses and without further information it is difficult to comment further.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
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