Can my partner buy PPOR?

Hi guys,

Just a quick enquiry. We're about to buy our first IP (no PPOR yet). I live in regional WA and my partner (not married) lives and studies in Perth. She doesn't have a full time job so she can't get a loan.

Would it be feasible for my partner to buy PPOR in Perth using our mutual savings and my income for a loan?

The idea is that she lives in it for a very short period of time and then we would turn it into IP and rent it out. This way we would take the advantage of CGT exemption (6 year rule).

Many thanks!

 

Are you saying the title will be on your partner and the loan will you on you and your partner? I can't see why not as long as you feel comfortable about this financial arrangement (there are risks) and you can meet the deposit and serviceability criteria, but better to check with one of the many experts here.
Other things to consider: what's the minimum requirement to satisfy the six year rule in WA? Also it is a good timing to purchase a property in Perth? (I.e. Will the price drop further?)

 

Hey,

Good point about timing; we are actually waiting for prices to drop further so we might buy anytime between now and the next two years. We'll be monitoring things like vacancy rate, rents, month to month house prices etc.

We feel quite comfortable with any financial arrangement. So we don't mind if the title is on her name and the loan on mine.

My understanding is there's no minimum requirement to live in the property to satisfy the six year rule (can be one day as long as she can prove she lived there).

So it sounds life this is possible for us to achieve. Many thanks.

 

If by partner you mean 'spouse' then yes many banks will lend to both of you with just one of you on title.

 

You have to establish it as the main residence. Just living there for a day probably wouldn't do it.

 

Hey Terry,

We are not married yet. We used to live together for 2 years before she moved out to finish her studies.

Can I get the loan on my name and still make it somehow PPOR, while I'm not living there?

 

Are you 'defacto'?

 

We used to live together for two years before she moved out, so maybe we were defacto but not anymore?

Also my partner is receiving Austudy support for her course. On the eligibility test they asked whether we live together (no) and whether we have common property together (no).

 

On the face of it this can be done. is she hoping to claim FHBG?

 

Thanks Jess.

We are not planning to buy a new house so probably we won't be able to claim FHBG anyway.

 

It will depend on the circumstances. You can still be defactos without living together.

 

I'm assuming we are not, as the government is not seeing us as defacto (she was able get Austudy support for her studies).

Oh this is getting more complicated

 

The "government" is a terrible place to get your legal advice on whether you are de facto or not. Centrelink especially.

 

It is irrelevant what the 'government' sees you as in this instant as you are talking about finance. So all that matters is what the lender sees you as.

 

I would suggest your loan structure would not especially interest centerlink, particularly if you're not living there and not living with her at all.

 

The government has taken her word for the de facto issue based on the answers she gave on the application.

That does not mean they will not or cannot investigate in the future.
Marg

 

You can still get a stamp duty exemption if purchase price is 430k or less and pro rata between 430-530k for established property. Can be a significant saving depending on the purchase price.