Non resident buying property perth

Discussion in 'Legal Issues' started by Geodude17, 1st Apr, 2022.

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  1. Geodude17

    Geodude17 New Member

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    Hello all,

    Need some advice/clarification on a potential issue.
    I’m a currently a non resident (UK citizen), visa is currently going through to attain PR. I am currently living in Perth and looking to buy a house with my girlfriend/soon to be fiancé (aus resident).

    For tax reasons, as a non resident my name wouldn’t be on the property but obviously I would be providing money for the purchase of the house and the mortgage thereafter.

    What rights do I have in terms of recouping my investment into the the property, in case something does happen and we have to sell the property?
     
  2. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    who would be the owner? Spouse? If you provide the money for the settlement you would have a beneficial interest in the property and could make a claim under family law and trust law in the future if things go wrong but mortgagee will take priority.
     
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  3. Geodude17

    Geodude17 New Member

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    Hello, thanks for your response. Yes on paper the owner would be my partner. Is it worth getting law advice on the subject?
     
  4. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    that may be a good idea as not being an owner you could wake one day to find the property has been sold, leased, bequeathed or mortgaged without your consent or even knowledge
     
  5. Scott No Mates

    Scott No Mates Well-Known Member

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    You might also need to seek FIRB approval.
     
  6. tomerayz

    tomerayz Well-Known Member

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    no need to seek FIRB approval, they aren’t on the mortgage or title. We did this exact thing while I was on an 820 visa waiting for my PR to come through so we bought in my partners name. Once PR came through, we contacted out conveyancer who did the paperwork & added me to the title without me paying stamp duty as we’re de facto.
     
  7. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    This can have tax consequences down the track if you ever rent the property out.
     
  8. tomerayz

    tomerayz Well-Known Member

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    Yeah she did tell us about that but this is something we wanted to do. If we ever turn this home into an IP, it won’t be for 6+ years anyways. I’ll have our accountant go over it with us this year as we only did it a few months ago.
     
  9. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    In NSW you could have purchased 50% off the spouse at full market value and have had no tax issues. However if you transferred for non consideration or undermarket value then in the future when you rent you could only claim half or the interest, or a bit more perhaps - no matter how much later you rent it.
     
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  10. Westminster

    Westminster Tigress at Tiger Developments Business Member

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    Absolutely! This needs legal advice on how to ensure your contributions are safeguarded and to work out the future path forwards for when you want to transfer it - that may need legal and taxation advice.

    Transfers to another spouse rules vary from state to state so you will need specific WA advice if the IP is in Perth.
     
  11. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    Tax Tip 341: Deductibility of Interest When Adding a Spouse to Title of a Property Tax Tip 341: Deductibility of Interest When Adding a Spouse to Title of a Property
     
  12. tomerayz

    tomerayz Well-Known Member

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    Would it work the same if the property was re-financed to a different lender at the same time the title was changed? Timeline below:

    Bank A: 1 person on the title & mortgage

    title change

    Bank B: Refinance with both people on the title and mortgage.
     
  13. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    Refinancing doesn't change deductibility of interest.
     
  14. tomerayz

    tomerayz Well-Known Member

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    Gotcha, thank you for clarifying & for the info Terry!
     
  15. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    For the interest to be claimable the non-owner spouse must actually buy 50% off the owner spouse and borrow to do so. Stamp duty laws in some states will not allow the exemption unless the transfer is a gift - VIC and QLD are like this. NSW isn't, it allows a market value sale. Not sure about WA off the top of my head but have written a tax tip about it on here before.
     
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  16. Bonz

    Bonz Well-Known Member

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    mid get some good legal/immigration advice. I do not believe as a non resident you can own property. If you are claiming a half interest in a property as a beneficial owner you may be breaching your visa conditions and Cld have flow on effects to obtaining your PR if the department find out.
     
  17. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    He wouldn't likely be a beneficial owner of the property at first instance. The spouse would.