Investment loan - 2 applicants with 1 name on property title

Hi,

I'm considering to refinance my investment loan. The property is solely under my name but my broker advised me that I won't be able to refinance without including my wife as an additional applicant.
Assuming we apply jointly for the loan will my wife be able to claim her portion of interest repayments as tax deduction without changing the title?

Thank you!

 

no

 

I assume I won't be able to claim 100% of interest payments myself, so is there any way around it to maximise tax returns?

 

Is there a possibility to use spousal servicing guarantor or common debt reducer?

 

Thank you for the suggestion. I'm afraid common debt reducer won't help in this case and I'll ask my broker about the first option.

 

best not to assume as it can be costly.

 

Tax Tip 79: Interest Deductibility for 1 on title 2 on loans


Tax Tip 79: Interest Deductibility for 1 on title 2 on loans

 

Thank you! I'll have a read

 

Your assumption is the issue. Its wrong.

Rental income and expenses are treated for tax purposes the same as LEGAL title. Not who borrows. Some lenders allow a additional spouse borrower. This doiesnt mean she has any legal interest and she cant claim a cent.

 

Lenders often require other applicant to be on the title, min 1-10% ownership share

 

Hi Paul,

Can you explain it to me as to a dummy?
If I add my wife to refinance application and she's not on the title what I will be able to claim and what will she?
In my understanding it's 50% of interest for me and 0% for her. But I'm happy to be wrong.

Thanks!

 

Did you see my responses above? You are wrong

 

The purpose is irrelevant. Its the use to which borrowed funds are put that allows interest to be deductible.

 

Hi Terry, I appreciate the help but continuously saying that I'm wrong without saying what is right doesn't help me too much.

My assumption comes:
1. from the parallels when A and B have funds in joint savings account and earn interest each of them pay taxes on 50% of the interest.
I thought that with loan interest repayments I can claim only 50% similar to the above.

2. And because what you wrote in your Tax Tip 79:
"So where A owns the property and both A and B are on the loan who can claim the interest?
Only A can as A is the owner of the property."

So adding 1 and 2 together I came into the wrong conclusion.

Now back to the previous question: will I continue be able to claim 100% of the interest after adding my wife to the loan without her being on the title?

Thank you all.

 

i am not about to give you legal advice without knowing all the details or charging you.

 

I'm not asking for a "legal" advice and I did use your services last time I refinanced 2 of my loans (Phillip Tang assisted me).

 

in that case send me an email and I will give you free legal advice

 

Mail sent, thanks a lot!