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Purchasing "mainly" in spouses name- portioning the ownership

Discussion in 'Accounting & Tax' started by Daniel Jurin, 14th Jan, 2016.

  1. Daniel Jurin

    Daniel Jurin Member

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    my wife and I own a few properties-all in Qld. One is in my name and the rest are 50/50 ownership. I have reached the land tax threshold, my wife hasn't.
    We are planning to purchase another property. If we did purchase again in Qld, I want to put the property in my wife's name to avoid myself paying land tax. However, we are both going on the loan as my wife only works part time. Is it possible to split the ownership so that my wife owns, for example, 95% of the property? Will the banks accept this if the loan is in both names? Also, what are the implications of putting the property in mostly my wife's name, are there any I should be aware of other than the obvious ( the obvious being that she claims 95% of tax stuff).

    I know the obvious solution is to buy in another state, but that is why I am asking the question, to work out if buying in Qld is a valid option still.
     
  2. D.T.

    D.T. Adelaide Property Manager Business Member

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    Considered buying in a trust?

    Trusts in qld, SA and WA get a clean slate of land tax threshold. You can then distribute returns out to whichever partner was most tax effective.

    Otherwise consider buying interstate, too.
     
  3. Paul@PFI

    Paul@PFI Tax Accounting + SMSF Business Member

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    Tenants in Common has two options. Equal shares or any other proportions. Just bear in mind that % becomes fixed and changing it is dutiable later. I find that owners who do this consider the short term tax issue and then in 10 years when its strongly +ve geared and the land tax thresholds change etc they realise they have a different set of problems.

    A disc trust in QLD does provide a separate threshold BUT comes with other issues you need to consider eg negative gearing wont work.
     
  4. Jess Peletier

    Jess Peletier Mortgage Broker - Australia Wide Business Member

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    Another option is buying completely in her name but both of you being on the loan. This is perfectly fine due to being married/partners you have an interest in the property by default. Just bear in mind that all the tax deductions will go to her, not you.
     
    Daniel Jurin and Scott No Mates like this.
  5. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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  6. Daniel Jurin

    Daniel Jurin Member

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    Thanks Jess for your input. It is helpful to know that I can get a loan in both names and the house in my wife's name. It helps me to move forward.
     
    Jess Peletier likes this.
  7. Paul@PFI

    Paul@PFI Tax Accounting + SMSF Business Member

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    Is it going to be neg geared ?
    Will her income continue ?

    Think long term when after 6-8 years many neg geared properties become +ve geared....Would you do the same ?

    Based on her working PT this may not be practical if its neg geared. Chasing a land tax saving may lead to other tax issues.