Buying PPoR before getting married pro and cons ?

[JohnHenry]

Hi,

Can anyone here, please share your experience and tips to buy the PPoR with your beloved partner before getting married ?

shall I just buy the property under my name and then later on in the future, she can buy another one for investment under her name so that it is a separate for both of us.

I believe that from taxation point of view the above sounds like a good plan.

 

[wylie]

If you are going to marry your "beloved" then buying before then needs to be set up to suit you once you are married. If you are buying in your name now prior to marriage to protect the asset in the event you don't go through with the marriage, that could backfire.

If you buy in your name now and buy an IP in her name once you are married is that because you want things kept separate in case things don't work out? That was my first thought.

Assuming all the above is wrong, then the thing to do would be to work out what will happen when children come along, and your wife may decide to not work for a while. You need to at least think about what may happen to the rent if it is in your wife's name but she has no income to deduct any negative gearing against (if it is negatively geared) etc.

A bit of forward planning would be good, even though you cannot plan everything.

 

[Peter_Tersteeg]

From a legal and finance perspective, if you're already in a defacto relationship (essentially living together and working towards the same goals, with some cross-over of finances), you're essentially already married.

If you're living together but not in a defacto relationship, purchasing a house together is would create a defacto relationship.

The obvious advantage to purchasing a PPOR as a single person, is that you would qualify for the first home owners grant and the other person would also be able to purchase their own PPOR and qualify for the grant and other benefits. If you're married or defacto you only get this once between you. The disadvantage to this is that the owner of each PPOR must actually live there.

 

[tobe]

buy a PPOR when you can afford it, or invest what you would have in a mortgage somewhere else. Dont spend lots of money on a wedding, and certainly dont plan a wedding overseas. Its just downright rude making your guests spend thousands of dollars to come to your wedding.

 

[JohnHenry]

If you are going to marry your "beloved" then buying before then needs to be set up to suit you once you are married. If you are buying in your name now prior to marriage to protect the asset in the event you don't go through with the marriage, that could backfire.

If you buy in your name now and buy an IP in her name once you are married is that because you want things kept separate in case things don't work out? That was my first thought.

A bit of forward planning would be good, even though you cannot plan everything.

Yes that's true as well, what can I do to protect my asset just in case things doesn't go well :-/
shall I just keep everything under my name and the IP is under her name.

 

[BMW]

From a legal and finance perspective, if you're already in a defacto relationship (essentially living together and working towards the same goals, with some cross-over of finances), you're essentially already married.

If you're living together but not in a defacto relationship, purchasing a house together is would create a defacto relationship.

The obvious advantage to purchasing a PPOR as a single person, is that you would qualify for the first home owners grant and the other person would also be able to purchase their own PPOR and qualify for the grant and other benefits. If you're married or defacto you only get this once between you. The disadvantage to this is that the owner of each PPOR must actually live there.

Although this is quite common i don't think it is technically allowed is it?

 

[JohnHenry]

From a legal and finance perspective, if you're already in a defacto relationship (essentially living together and working towards the same goals, with some cross-over of finances), you're essentially already married.

If you're living together but not in a defacto relationship, purchasing a house together is would create a defacto relationship.

The obvious advantage to purchasing a PPOR as a single person, is that you would qualify for the first home owners grant and the other person would also be able to purchase their own PPOR and qualify for the grant and other benefits. If you're married or defacto you only get this once between you. The disadvantage to this is that the owner of each PPOR must actually live there.

Cool, that's what I thought so, because I was confused later on if we both get married, her surname will change the same as mine, then ATO or OSR would think that we're both the same couple so it negates the FHOG.

many thanks for the explanation Mr. Bear

 

[JohnHenry]

buy a PPOR when you can afford it, or invest what you would have in a mortgage somewhere else. Dont spend lots of money on a wedding, and certainly dont plan a wedding overseas. Its just downright rude making your guests spend thousands of dollars to come to your wedding.

Correct mate, the wedding that I plan is just a small intimate outdoor wedding in Wollongong botanical garden, well its a trip for some people in Sydney but at least it is not overseas.

hopefully when our parents bless us with some nice amount of lump sum cash to paid off the mortgage it is free from tax as well.

 

[BMW]

Yes that's true as well, what can I do to protect my asset just in case things doesn't go well :-/
shall I just keep everything under my name and the IP is under her name.

I know divorce rates are quite high, but planning a get out clause prior to marriage just doesn't seem like the right attitude.

 

[tobe]

Although this is quite common i don't think it is technically allowed is it?

two single people can get the FHOG each, and then get married, no probs. Any other variation isnt possible, ie he buys first, then gets married, or defacto, she isnt eligible, etc.

 

[tobe]

Yes that's true as well, what can I do to protect my asset just in case things doesn't go well :-/
shall I just keep everything under my name and the IP is under her name.

In short, there isnt much you can do. It doesnt bear much weight whose name the property is in, or who paid the deposit, or repayments. You could try getting a binding financial agreement, but these two dont always hold up in court.

 

[RPI]

Binding financial agreement. Doesnt matter whose name anything is in, family court will get around it. if you are not already defacto, lineal descendant trust possibly. Properly executed bfa is best way. Dont use a crappy lawyer like Grant Hackett did, they didnt even advise that parties needed independent advice, unbelievable.

D

 

[Witzl]

Wife and I bought our PPOR before we got married, but we'd been living together for around 2-3 years already so in the eyes of the law we were defacto.

Our investment properties, however, are bought in individual names so as to minimise the impact of land tax as we build our portfolio up.

 

[Terry_w]

Dont use a crappy lawyer like Grant Hackett did, they didnt even advise that parties needed independent advice, unbelievable.

D

Are you serious? Isn't that a f - up!

I agree BFA it or set up "chasty trust" (tm). A life of frustration and loneliness is the way to go.

 

[RPI]

I could name the firm, it was in the paper. The worst part is they did it twice, he had a new one made when his kids were born. Its pretty fundamental isn't it. Hello insurance premium rises. I hope at least the lawyer in question had a serious drug problem or some other valid reason and wasn't just a complete idiot. $4million in assets too, so not exactly some minor deed.

 

[JohnHenry]

I know divorce rates are quite high, but planning a get out clause prior to marriage just doesn't seem like the right attitude.

Yes, that's what my partner may feel :-/

 

[JohnHenry]

In short, there isnt much you can do. It doesnt bear much weight whose name the property is in, or who paid the deposit, or repayments. You could try getting a binding financial agreement, but these two dont always hold up in court.

Hm.. then it is not entirely safe measure to protect the asset. Thanks for the explanation anyway.

....jennifer lopez - my love don't cost a thing...

 

[JohnHenry]

Wife and I bought our PPOR before we got married, but we'd been living together for around 2-3 years already so in the eyes of the law we were defacto.

Our investment properties, however, are bought in individual names so as to minimise the impact of land tax as we build our portfolio up.

Cool, that's what I call interesting, then yes, that is also one of the strategy to minimize tax I learn from you Witzl.

So to reduce the tax rate in the future when my partner no longer working (stay at home mum taking care the kid), the cashflow positives IP should not attract tax assuming the total net income from this IP is less than $20k or whatever tax free bracket in the future.

 

[C-mac]

I need to read further into de-facto laws and stipulations, particularly if no children occur in the relationship and each partner's contribution to the household is fairly 50/50.

Cameron McEvoy
www.propertyspectator.blogspot.com

 

[Big Will]

If you are thinking what if it doesn't work out, you are already doubting yourself in my mind.

I bought a property 2 years ago and got married 6 months ago. To have her name on the title it is beyond a joke and very costly. At the end of the day once you marry it becomes ours not yours. So only if you are trying to claim first home buyers twice would you do it. However i can tell you from experience it does cause pain on her side and alot of trust as my wife and most likely yours will have an issue paying for something that isnt in her name. We are working through it and she is now basically okay with it now.

I just cant wait for her to get a house under her name (reverse situation).