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De facto partner contributes to my mortgage, how does that affect my tax?

Discussion in 'Accounting & Tax' started by dmo, 1st Aug, 2016.

  1. dmo

    dmo Active Member

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    Hey all, hoping this is a simple question that can be answered, cleared up for me easily.

    I've spent the evening arranging all my tax documents and was going to meet with my tax man next week to go through everything, but I had a question about my current and only mortgage.

    The mortgage is in my name only. My partner of 4 years (de facto, living together for 3 years) contributes to the mortgage as well and transfers money into the offset account that is used as the direct deposit account.

    How does this affect me tax wise, and would they look at her contributions as income? or because we're de facto it doesn't affect anything?

    Thanks in advance.

    ~ Dan
     
  2. kierank

    kierank Well-Known Member

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    I am not a tax specialist.

    I assume the mortgage is against your PPOR. If it is, the interest is not tax deductible so the tax man couldn't care less how your mortgage is paid.
     
  3. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    You are confusing 'mortgage' with 'loan'.

    Your partner pays the loan. No direct tax effect if either PPOR or IP if they are not on title.

    It would only be income if you are trying to disguise payment for something.
     
    Perthguy likes this.
  4. John Bone

    John Bone Well-Known Member

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    Your partners payment of the mortgage may give them part ownership in the property if you were to separate. If the payments are seen as rent this may be avoided but you are not declaring them as rent in your tax returns.
    There could also be a claim if you were to die.
     
  5. Gockie

    Gockie I'm an ISTP-A female, so I might be a bit quirky! Premium Member

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    I think the mere fact they have been living together for 3 years actually means if they were to separate they would be treated as a couple and their assets can be spilt.

    As to taxes... no effect. Assuming we are talking about a ppor.
     
  6. willair

    willair Well-Known Member Premium Member

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    I'm not a Accountant,but tax wise it may not be a problem,and as the title is registered in your name only ,that's where you would want to be very care full long term..
    Because "IF" you both split up then something like this with bank transfer statements ,could become a real mess..
     
    Last edited: 2nd Aug, 2016
  7. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    Paying a loan would actually give someone an equitable interest in the property so they would have a stronger claim under the famil law act the succession laws and in equity. Also asset protection issues is that person were to end up bankrupt
     
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  8. dmo

    dmo Active Member

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    Yeah i've been aware of this understanding from agreeing to the situation. I'm confident of the direction and position of the relationship and while there is the element of unknown i'm sure that can be addressed if it ever comes up.

    Yes, it's against my PPOR – sorry didn't specify that.

    Thanks everyone, it's certainly helped add some clarity to the situation and I'll take this information and the rest of my situation to the accountant next week.
     
    Perthguy likes this.