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Question re: Names on Title and Claiming at Tax Time

Discussion in 'Accounting & Tax' started by Patamea, 18th Aug, 2015.

  1. Patamea

    Patamea Well-Known Member

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    Hi all,

    I'm about to purchase IP1 (no PPOR) and have a couple of questions:
    - My wife is currently on maternity leave and earning minimal income. If both our names are on the title, how is it decided who claims what at tax time?
    - As I pay the most tax, would it be best to put it all in my name and therefore claim all expenses/deductions?

    Thanks in advance.
     
  2. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    1 - Names on title determines who claims costs. 50/50 ownership means expenses are claimed 50/50 each - no matter who pays for them.

    2 - if the property was negative geared you may get more tax benefits. But rents increase and values grow so think short term and long term.

    see my tax and legal tips about structuring ownership and loans
     
  3. Patamea

    Patamea Well-Known Member

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    Terry_w likes this.
  4. Paul@PFI

    Paul@PFI Tax Accounting + SMSF Business Member

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    K - Of course your wife may accumulate tax losses as a consequence of this. Important that a return is prepared and these losses are rolled onwards. The ATO doesn't actually do this for you !! One of the problems with DIY returns is these are easily missed - etax doesn't cater for prior year losses very well.

    So in a few years time she could end up with a decent "deduction" to eliminate tax payable and a decent refund. Therefore the deductibility of the rent losses is deferred NOT lost. In meantime think of strategies to push passive income (ie interest on savings ?) to her rather than say joint names.
     
  5. Patamea

    Patamea Well-Known Member

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