Adding my partner to my titles

Savanna100

Savanna100

Hi everone, its been a while since I've been here on SS. I have a question...

I have two houses where I am the sole title-holder. I now wish to add my partner of 9 years to the titles. One house is in Canberra and one house is in Melbourne. Altogether, they are worth about $1.5m

I am doing this so that we can borrow as a couple as I would like to do a development. Can anyone here please advise me who I approach to add someone to a title? I'm suspecting that its more than just approaching the land titles office in each state. I would rather not put it into the hands of a lawyer if its just a few forms to fill in. I'd love to hear from others who have done this too.

Also, please feel free to advise me if this is not a smart move and we can borrow just as well without my partner having a slice of my houses (but I suspect the banks would prefer he was an owner of my properties too before we can borrow decent amounts).
 
alexlee said:
Might be worthwhile talking to a mortgage broker first. Transferring half will trigger CGT for the IPs.
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the canberra one anyway. In victoria its free if 'love and affection'.

Note, depending on the lender, you both dont need to be on title in order to use joint borrowing capacity.

However, it may be your goals are best served keeping them seperate (depending on what your goals are of course!)
 
Is it necessary to transfer the title? A mortgage broker could help you out here- but I would have thought that a new loan wouldn't treat the existing security differently under one name or two. I thought that do a joint loan they would combine the securities, the incomes and the debts and work out what could be done from there.
 
OK, thanks, I'd not considered capital gains, I was mainly worried about having to pay stamp duty.

So, I'd be happy to hear more about capital gains implications. I told my mortgage broker I was thinking of doing this and they said to speak to a conveyancer but did not mention that there might be CGT implications.
 
Its more than just filling in a few forms and you do need to seek legal advice because there are several issues which you may not be aware.

1. Asset protection. If you are going to be doing a development then consider asset protection. Developments are dangerous so if it fails you both don't want to go bankrupt and lose your assets.

2. Tax. If you transfer for 'love and affection' of no consideration how will this affect deductibility of interest on investment loans?

3. CGT. What is the effect on CGT by adding a name to title. Are there better strategies

4. Family law. What if a separation happens - stronger position if you have legal owership.

5. Land tax. This could be effected depend on your circumstances

6. Loans - exit and entry costs. Cross collateralised? Guarantees. Future servicability etc

7. Estate planning. JT or TIC. What if you die and he remarries a girl 1/3 his age and then dies leaving everything to the new wife and nothing to your children etc etc

8 etc
 
I will probably die before him as I'm 56 and he's 39 :)

I have a will and, at present I've left one house to him and one to my daughter.

I wanted to put him on the titles so that the bank would lend to us as the joint owners of the $1.5m worth of property and would take both salaries into account.
I also wanted him to get the usual rental property tax deductions too, which I presume he cant at present , not being on the title.

I assumed that putting him on the titles would make a difference but I wont do it if its going to cost me more than any filing fees or nominal amount.

suggestions??? I'll push my broker to explain a bt more I think.
 
geoffw said:
Is it necessary to transfer the title? A mortgage broker could help you out here- but I would have thought that a new loan wouldn't treat the existing security differently under one name or two. I thought that do a joint loan they would combine the securities, the incomes and the debts and work out what could be done from there.
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Lets hope so Geoff :)
 
Jamie M said:
You can do this without him being on title. It's quite common.

Cheers

Jamie
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Hi Jamie,
The bank did lend us (jointly) $221,000 last year to finish our development in Melbourne but I had assumed that me being on title alone would mean that serviceablity might be an issue in the future when we go back for further bites of the cherry .

It's sound like I have worried too much about this and it isnt as bad as I thought.
 
Savanna100 said:
I will probably die before him as I'm 56 and he's 39 :)

I have a will and, at present I've left one house to him and one to my daughter.

I wanted to put him on the titles so that the bank would lend to us as the joint owners of the $1.5m worth of property and would take both salaries into account.
I also wanted him to get the usual rental property tax deductions too, which I presume he cant at present , not being on the title.

I assumed that putting him on the titles would make a difference but I wont do it if its going to cost me more than any filing fees or nominal amount.

suggestions??? I'll push my broker to explain a bt more I think.
Click to expand...

If you became joint tenants than the property would not pass in your will. Survivor would take the whole property.

No need for both to be on title to borrow.

If you just transferred title to him then you would lose deductibility of interest and this would cost you tens of thousands of $$$

Seek legal and taxation advice - which your broker cannot provide, and probably better to get a new broker too by the sound of it.
 
I wrote a similar deal the other day for an existing WBC client. Just need to explain the reasoning in the notes and it's rarely questioned.

Cheers

Jamie
 
Family law act.........really dont need to be on title to be seen to have a derived benefit.

BUT.............there may be some regearing benefits depending on tax positions etc

ta
rolf
 
Savanna100 said:
Hi Jamie,
The bank did lend us (jointly) $221,000 last year to finish our development in Melbourne but I had assumed that me being on title alone would mean that serviceablity might be an issue in the future when we go back for further bites of the cherry .

It's sound like I have worried too much about this and it isnt as bad as I thought.
Click to expand...

Don't worry about it it isn't an issue if he's your spouse. Piece of cake.

Whether it's a good idea from a tax/contingent liability/servicing point is an entirely difference issue altogether.
 
There could be some benefits from a gearing point of view but you'd need to crunch the numbers with your accountant.

Not sure about the legal side of things but he might take comfort in actually owning a portion of the property(s) - particularly if he is partly responsible for the debt.

From the other posts though, it sounds like you were concerned about servicing - and thought that you needed both on title to make it work. That doesn't need to be the case.

Cheers

Jamie
 
Is there something about what can be claimed on tax?

If you were the only person in the title then who claims the loss or the gain?

If this was a matter of concern then it may be worth while to consider a trust.

I bought a few properties in my name when I earned the bigger income. When Subway came along I only drew a small income so didn't get the negative gearing benefits

However the one property we had which was positively geared was bought through a trust. That enabled us to take best advantage of changing comparative incomes.

That may be something to consider for your next property rather than for existing ones.
 
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