buying a second house in a childs name , company or wife or joint names?

hi

wonder what would be the advantages and disadvantages for buying a second house in a childs name , company or wife or joint names?

i own my own small old house out right in just my name but with 2 toddlers its a bit small now. dont really want to sell until i get my roi for the solar panels installed. might just rent the rooms to students and move.

im self employed with a company turning over about $100 000 to 12000 gross

and from this a draw a wage of about 30-40k per year

have about 250k cash saved up

wife is getting partial parenting payment

i wonder if i buy a new home with the wife name on the title too and live in it for at least 12 months rent out the rooms of old house for cash to uni students will we have to declare anything to centrelink and will it effect the wife getting parenting payment and family tax benefit.

also wonder if its possible to buy a new home in companys name or childs name and live in it? any pros or cons in doing this instead?
 
hi

wonder what would be the advantages and disadvantages for buying a second house in a childs name , company or wife or joint names?
It would be best to speak to someone who is a qualified expert in these matters, but I'll throw in my 2c worth for further thinking -

No matter which entity you buy the 2nd house in, if there is a loan attached to it, the Bank will want to see security for the loan (the 2nd house), and DSR (Debt Serviceability Ratio). In this aspect, they will look at your personal income and a percentage of the rent towards the repayments.

If the house is in the child's name, you will need to be a guarantor for the loan, I'd imagine, and put up your existing house as security.

If it is in a Company name, the Bank will want company income records, assets as security, and you will probably need to provide Directors' Guarantees etc, plus maybe the existing house as security.

In joint names (which is how we've always done it), the accountant works out the breakdown of expenses and income etc attached to each spouse, and then the tax returns are worked out from there.

In wife's name - unless she is earning an income, there are no tax benefits from the property if it is a rental (and vice versa if you use your existing property as the rental).

i own my own small old house out right in just my name but with 2 toddlers its a bit small now. dont really want to sell until i get my roi for the solar panels installed. might just rent the rooms to students and move.
It would actually be better for you to sell this house, use the proceeds towards buying another house and then use the equity in that house to buy a new IP. This way, the loan interest on the IP becomes tax deductible. If you use your cash and another part-loan to buy another house to live in (PPoR), the loan interest is not deductible

i wonder if i buy a new home with the wife name on the title too and live in it for at least 12 months rent out the rooms of old house for cash to uni students will we have to declare anything to centrelink and will it effect the wife getting parenting payment and family tax benefit.
Yes it will. To not declare it is your choice, but the consequences of getting caught are not good. Plus, you lose the other tax benefits associated with the house such as insurance, rates, maintenance, etc.

also wonder if its possible to buy a new home in companys name or childs name and live in it? any pros or cons in doing this instead?
See above. It may be possible to do it, then rent it back to yourself as a private individual.

Professional legal and accounting advice is a must, now.
 
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to add to the above, if you buy in the child's name, they are up for tax at the highest rate for 'unearned' income and will also lose their FHBG if they qualify for it.
 
How is a toddler going to enter a contract? What if the toddler later enters a defacto relationship and then breaks up - property settlement. What if the toddler sells the property and uses the proceeds on designer nappies?

Centrelink benefits will be affected whether you own in your own name, spouse or a company you control - assets test and income test.

Considered land tax issues? CGT?
 
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