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You are assuming that the deduction is based on the name the loan is in. It is the legal title that determines deductions. Loan can be in three names if you wanted but only the two on title would share income and deductions based on the % interest on title.

I knew you knew. We are working on same issue with a real client.:)

Not quite..... The original loan is $100K....When the wife disposes of 50% of her interest to spouse with a new $200K loan the wife loses 50% deductibility on her loan. Why ? Because the $100K relates to a 100% share of ownership..Reality she will pay it down to $50K. So the new deductible...

100% with Terry here. However if its 100% sole ownership and you want it 50/50 TIC or joint tennacy and its the residence at date of transfer then no duty. The day after you can move out, make it an IP and in the change of ownership refinance it and have a bigger loan.

No. The 30% change would be 30% dutiable. s104B only permits from a sole owner to a JT or 50% TIC. If only you could take the title deed on a flight and be duty free :-)

Frequent posts here mention the Victorian concession which allows a spouse transfer free of duty. What is little understood is a similar provision exists in NSW. Its a bit more rigid than the Vic exemption however. s104B of the Duties Act NSW permits a transfer from ONE spouse so that...