Property ownership, name on loans, effect on Tax

[Gill Bates]

I have an existing property that I would like to mortage, ie a LOC.
The property is in my name only.
I could need to include the wifes income on the loan application for servicability. ( ie the loan would be in 2 names)

I plan on using the LOC to service some of my other loans if I was ever unable to work for a extended period.

These other loans and assets are in my name only.

What is the tax implication of this? ( ie the difference between the LOC being in my name only OR both names)

Does this change if my wife stops working?

Thanks.

[DaleGG]

Hi

The tax office, as a rule, follows the money and the purpose of the loan.
Therefore, whether the interest will be tax deductible will depend upon what you do with the new loan.

The tax office are understands that sometimes the banks force us to have loans in joint names even though the investment might be in a single name. So, they allow the person investing in the asset to claim 100% of the interest that is charged on the loan used to buy that investment. Therefore, your wife will not claim any of the interest unless you place her name on the asset that you intend to buy.

I hope that this helps

Dale



I have an existing property that I would like to mortage, ie a LOC.
The property is in my name only.
I could need to include the wifes income on the loan application for servicability. ( ie the loan would be in 2 names)

I plan on using the LOC to service some of my other loans if I was ever unable to work for a extended period.

These other loans and assets are in my name only.

What is the tax implication of this? ( ie the difference between the LOC being in my name only OR both names)

Does this change if my wife stops working?

Thanks.