PPOR - Single Income - Any strategies?

Hi Guys,

Hoping to gain some insights from the seasoned investors and broker folk on here. To avoid any complications of personal advise, I have generalised the scenario.

Lets say Husband and Wife are looking to buy their first home soon (PPOR). Husband is the sole income earner in his family. Wife is unemployed and will remain so.

My question is this - given that Wife is unemployed what should be Husband’s strategy to structure the PPOR mortgage? Is Husband better off having the title and loan on his name only OR should he have a joint title but loan completely on himself OR joint title and loan? Which setup may play out best in each of the following scenarios that may occur in the future.


1) They put the PPOR on Rent (Investment property) and given negative gearing may no longer remain after Labour

– If Wife is on the title she can count some of the rental income and potentially tax free?
– If negative gearing remains, then would be better off having loan and title just on Husband’s name to offset against income?


2) Husband dies and would like his Wife to have the house without any procedural hassles - Easier if Wife is on title?


3) They get divorced – Easier if just Husband is on the title? (from his perspective)


What is the most common setup that families with single income families opt for when buying their PPOR? Is there a strategy with splitting the loan that can help? that can Any further suggestions on how this should be approached would be of great help.


PS: I had a look at Tax Tip 21 – Advantage of Buying in 1 Name only. However that seemed to be focused on Investment property tax optimisation. I am obviously a newbie to property and still aspiring to buy my first home. I am curious to understand if there are any strategies out there that can help with PPOR too.

Thanks!

 

If this won't become an investment property then no tax consequences. But need to consider asset protection against the 4 possibilities plus estate plannimg

 

Thanks Terry.

So if in the future the PPOR is converted into Investment, then would it be easier to get Wife’s name added to title? Does it incur stamp duty in NSW?

Sorry for this silly question - how to approach asset protection against divorce?

 

See my tips and seek legal advice.

Depends on how you define "easy'. Simple to do, but there are consequences