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Taxes on rent under joint name.

Discussion in 'Accounting & Tax' started by Adele, 12th Dec, 2015.

  1. Adele

    Adele Well-Known Member

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    Hi everyone,

    I have a property purchased under joint name (my husband + my father).
    This property is being rented out at the moment but all the rent goes to my parents.

    What I'm wondering is; whether or not I need to lodge this in my income tax, as I do not receive any income whatsoever.
    This property is fully paid off (if that makes any difference)

    Many thanks
     
  2. Jess Peletier

    Jess Peletier Mortgage Broker - Australia Wide Business Member

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    Hi Adele,

    I'm not a tax advisor, but if you're not on the title and don't get any rent I can see zero reason for you to declare any.

    Your husband may have to though, as he is entitled to half the rent. It may be seen a him gifting his portion to your dad - I'm sure someone will be along shortly to clarify.
     
  3. skater

    skater Capitalist Premium Member

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    My understanding is that the income will be attributed in the same way as the ownership. Therefore if it is 50/50 split both income and expenses would also be a 50/50 split. But seek professional advice.
     
  4. Scott No Mates

    Scott No Mates Well-Known Member

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    Yes, all owners need to declare their portion of the income even if the payments go to one party.
     
  5. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    The legal position is that rent will be split according to legal ownership, unless there is a partnership or trustee relationship
     
    York likes this.
  6. Ozzie in Texas

    Ozzie in Texas Well-Known Member

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    That is also my understanding. In Texas, if the property was purchased while you were married, you are hold equal equity to your partner........and for tax purposes, are considered the same way.

    In my present circumstances, our family home was financed solely under my husband's name because at the time of purchase, I held a temporary visa and could not open a bank account without a social security number. However, title had to registered in both names because we are married.
     
  7. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    Married has no relationship to how property is legally owned.
     
  8. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    And I would be very surprised if this were the case. Are you talking about Australia?
     
  9. Adele

    Adele Well-Known Member

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    Thanks everyone,

    My accountant said the same thing. I was just wondering if there was a differing opinion.

    Would this be different for tenants in common ? As under the definition, tenants in common have unequal/unspecified interest in the property

     
  10. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    Tenants in common can be in unequal portions or equal. It depends how it is set up. If you own 90/10 then the rent and expenses will be split 90/10.

    Joint tenants are considered tenants in common 50/50 for tax purposes.
     
  11. Ozzie in Texas

    Ozzie in Texas Well-Known Member

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    As I said above, this is my understanding of Texas. We have bought here both as investors while still living in Australia......as well as residents of Texas.
     
  12. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    Sorry I missed that you mentioned Texas. Totally unexpected...
     
  13. Ozzie in Texas

    Ozzie in Texas Well-Known Member

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    Not in Texas. Unless it is protected under some sort of corporate structure.....it is an equal property state.
     
  14. Adele

    Adele Well-Known Member

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    I should rephrase my question to Does my husband need to lodge this as income? Although he did not receive any. Also in addition, does gifting it make it a tax deduction if he has to declare this.
     
  15. Adele

    Adele Well-Known Member

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    In this situation, how can my husband specify which party owns what percentage of the property?

     
  16. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    He needs to declare the income. Not deductible to make a gift unless the receiver has deductible gift recipent status.
     
  17. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    No. That would have been specified at purchase.
     
  18. York

    York Finance Broker Business Member

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    She is asking HOW to confirm % status if TIC. Not asking to change % now.
     
  19. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    Title search. or Transfer.
     
  20. Adele

    Adele Well-Known Member

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    Thanks so much @Terry_w, @York

    This property is giving us a headache because of this. It was purchased by my parents under a verbal agreement with us that it was to be gifted to my sister. It was not put under her name at the time, as she was not 18 yet.

    We are thinking of changing it back to her name ( my husband's share). Will there be any stamp duty etc for a gift with no money changing hands? I'm hoping that this will solve issues or confusion in the future.