Hi,
I have 1 investment property which is in my name as I bought this years ago when I was single.
My wife and I are looking to purchase a second investment property and I was looking for some general comments about whose name to buy this under – both, mine or hers – general advantages/disadvantages.
We currently rent and have bought and sold 1 PPOR about 2 years ago which was in both our names.
Hi Mat,
Couple of questions – Do you both work? If so, are your income levels similar? Will the property be negatively geared to begin with?
If one is in a high income bracket and it is negatively geared it's more tax effective to have it in that persons name. If it's positively geared it's more tax effective to have it in the low income persons name.
But if you sell and it it is in the high income persons name it will cost you more in CGT (assuming a profit).
So you need to look at the present situation and what your intentions are for the future with regards to selling/keeping.
Lots of variables. eg if you intend to keep it for, say 7 years and you plan for your wife to not be working at that time it may be beneficial to have it in her name.
Sometimes banks can be a bit funny about having a property in one name and having the mortgage in 2 names. You could do tenants in common with a 99% / 1% split (for example).
Set up a Discretionary Trust. It will be in no ones name, but under a company that doesn't trade. You both can be listed as beneficiaries. It's a little complicated to explain but some accountants can set it up. Definitely worth a look at.
roboproperty wrote:Set up a Discretionary Trust. It will be in no ones name, but under a company that doesn't trade. You both can be listed as beneficiaries. It's a little complicated to explain but some accountants can set it up. Definitely worth a look at.Consider the land tax, loss of negative gearing benefits etc too.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Does anyone know of lenders who will lend to a trust where the beneficiaries have bad credit but the trust is good and can put a sizable deposit down?
suzanneperth wrote:Does anyone know of lenders who will lend to a trust where the beneficiaries have bad credit but the trust is good and can put a sizable deposit down?Yes, all lenders that lend to trusts. As long as the trustee or director of the trustee is clean. This is for discretionary trusts. Unit trusts may be a bit harder, but can also be done.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Discretionary Trusts are definitely flexible, but if in NSW is that flexibility worth the extra land tax bill (normally no)
I do not like own name for ownership, accessing negative gearing can be a big bonus though. See a lawyer and an accountant and a mortgage broker. Costs some but, as long as they are good, pays for itself and pales in comparison to how much you are about to outlay on a property
D
RPI | Certus Legal Group / PRO Town Planners
http://www.certuslegal.com.au
Email Me | Phone MeProperty Lawyer & Town Planner
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