Strategy: Buying Investment Properties in 1 name only

Hi Peter,

I didn't mean to be rude. I'm sorry if it sounded that way. I really appreciate all the people who collaborate in this group.

And you are right, few months ago, I also thought that I could get the first home buyer benefits twice .

Peter, do you know if I can buy my PPOR under single name?

Thanks in advance.

 

I was also trying to apologise for sounding rude.

Yes you can buy a PPOR under a single name, I have a lot of clients who do this for many of the reasons that Terry initially outlined. It's usually something like forward tax planning (the PPOR might become an IP someday), but there's plenty of reasons why you might apply ownership strategies to a PPOR.

Best to get some specific advice to your circumstances if you're thinking of doing something interesting.

It's not a big deal from the finance perspective, but it's fairly rare that ownership structure improves serviceability overall. Usually it's the opposite.

 

I love your stories!!!

 

When you mentioned above "discretionary trust" is this different from a testamentary trust or the same thing in that instance?

When both Spouse A&B are alive, is it possible for a property to be held in a discretionary trust (or unit or hybrid) as a main residence and be exempt from land tax in NSW and/or other states or is it only for a trust formed upon death of a spouse?

 

Yes that would have been a TDT or testamentary discretionary trust.

A TDT held house could be land tax exempt in NSW under some circumstances and VIC and QLD as well. in VIC and QLD intervivos trusts can qualify for the land tax exemptions too - trusts set up during a life time.

 

Looking for some general advice.
PPOR - WA Tenants in common with wife - 50/50 - @ 5.95% P+I with offset with emergency funds parked in.
IP 1 - WA Tenants in common with wife - 50/50 - @ IO 6.5%
IP 2 - NT Tenants in common with wife - 50/50 - @ IO 6.5%
Looking to buy IP 3 & IP 4 one of which atleast would be in WA.

I am on max tax rate and wife on $45,001 – $120,000 tax slab as working part time while taking care of our bub. We dont see this situation changing much atleast for a few years ..
We both have roughly 25 years of working life ahead of us..

Now, looking at buying IP3 & 4 alternatevly we could look at cash flow positive units (3-4 units) instead of houses so as keep meeting our serviceability criteria under a trust structure.
Which would allow us to distribute incomes using bucket company entity to minimize taxes.

However if we were to buy houses can we structure in a way where I get the benefit of loan interest offsetting of IP and wife gets the income from rents which would be taxed at her marginal rate. ? There is not much literature available on this ..

 

To get the deduction there has to be income. section 8-1 ITAA97