Hi all Both wife and I signed the sale contract on our IP and have jointly applied for loan as one income wasn't enough to service the loan. Are there any benefits/demerits of changing the ownership structure for tax deductibility to say 90:10 in favor of me as I am the high income earner and wife will be going off on maternity leave soon? Strategy is buy and hold for long term.
See Legal Tip 68: Avoid 99%/1% ownership of property https://propertychat.com.au/community/threads/legal-tip-68-avoid-99-1-ownership-of-property.3237/ Strategy: Buying Investment Properties in 1 name only https://propertychat.com.au/communi...ng-investment-properties-in-1-name-only.5888/
Depends if the contract can be changed. As tax benefits flow the to person on title and not the loan there are several options...The loan issue seems a fixed issue but why 50/50 if she wont work ?Is the property likely to be neg geared ?? What do you each earn etc. Also - What other property do you each own ?Land tax ? Assuming none then why is it in two names if its neg geared ?If its positive geared maybe her name ? This should demonstrate benefits of discussing tax issues before you act. And aftre. You seem to need a tax adviser.
If its joint tenants or 50/50 TIC it would. The OP asked about making the contract 90:10 TIC. How can a contract and settlement be different without a CGT event ? My questions concerns the legal aspects to ensure the tax outcome is OK
No need. Can settle by direction. If there was a CGT event there would be no CGT as cost base would be the same as the proceeds.
Not in NSW between spouses s 18 from memory. Not sure about other states. Yes just checked s 18 Duties act DUTIES ACT 1997 - SECT 18 No double duty
Ty for the responses. The property will be negatively geared and is the only IP we have apart from a PPOR. The property is in Victoria, so will need to check Victorian law for double duty trigger. The reason I was saying 90:10 as I wasn't sure if it can be bought in one name as the contracts have been exchanged with two signatures.
The loan is with CBA and will need be in both names due to serviceability issues, won't be able to get it in my name, I don't think.
One for your lawyer to address. Good to see you have (albeit late) considered the issue. Provided you settle before 30 June I see no drama in Vic but legal advice needs to confirm how to do that
The Vic equivalent to the NSW s18 is S 17 Duties Act DUTIES ACT 2000 - SECT 17 No double duty but it is not as broad. As Paul says there is no duty on transfers between spouses in VIC anyway - but only until 30 June so you still have some time up your sleeve.
