Changing ower name on contract for sale of land?

[megb6806]

Hi. I am wondering if someone can help me out here. My wife and I put a offer on a property we are purchasing, two days ago. (19/04/2014), The contract for sale of land has been signed by wife and I and we are about to pay for the deposit, around $1000. We still haven't applied for bank loan, we are doing it tomorrow through a local broker.

I have read of this web site that there's not much point in putting a negatively geared property in joint names when the wife is not working. In my particular case my wife only works part time and she doesn't earn much, only $25000 a year.

Do you think I should change the contract for sale and have it only under my name as I pay more tax in order to maximise negative gearing of an investment property????

This is my first invesment property and as you can see I might be asking trivial questions but at this stage I am abit confused.

 

[thatbum]

Something to ask your solicitor? It sort of depends what you wrote on the offer and acceptance paperwork.

 

[Terry_w]

Tax aspects are only one thing to consider - seek legal advice on the broader issues and advice on changing the names - potential stamp duty issues mainlu as well as asset protection issues. If your offer hasn't been accepted you could always withdraw it and issue a new offer in the correct names.

 

[sour]

no brainer.. put it on your nam eand you should be fine. the tax bracket u are in will save more $$$.

the solicitor will re-direct you to tax agent and you will be lucky to get a good one.

think about this:

if you make $100k - tax rate is 35%
u get 35 cent back whatever u claim.

your wife only makes $25k so she can't claim it at all.

this is what i think.

 

[Terry_w]

no brainer.. put it on your nam eand you should be fine. the tax bracket u are in will save more $$$.

the solicitor will re-direct you to tax agent and you will be lucky to get a good one.

think about this:

if you make $100k - tax rate is 35%
u get 35 cent back whatever u claim.

your wife only makes $25k so she can't claim it at all.

this is what i think.

simplistic thinking. You are just considering short term income tax benefits - what about all the other stuff?

 

[megb6806]

no brainer.. put it on your nam eand you should be fine. the tax bracket u are in will save more $$$.

the solicitor will re-direct you to tax agent and you will be lucky to get a good one.

think about this:

if you make $100k - tax rate is 35%
u get 35 cent back whatever u claim.

your wife only makes $25k so she can't claim it at all.

this is what i think.

I know it makes more sense for me to change the offer under my name only, but the fact the application has beenalready submitted makes it binding and hence harder to change without some legal implications. Hopefully tomorrow I will have a positive answer from the real estate and they let me change the name.

Imagine I managed to put the offer only under my name, in this case will I have to get the bank loan only under my name??? or can I still get a joint bank loan??? ie under my wife and my own name? I am asking this because our house is under both names and the bank may only see 50% of the equity if I apply by myself, Is this how it works?

 

[megb6806]

simplistic thinking. You are just considering short term income tax benefits - what about all the other stuff?

what other stuff Terry?

 

[Terry_w]

what other stuff Terry?

heaps

for starters, What if you
die
lose mental capacity
go bankrupt
relationshipp break down
gambling problem
get a credit default and can't borrow.
stop working
sell

etc

This doesn't mean you shouldn't buy in one name, but need to consider the broader implications. legal owner can dispose or mortgage the property independant of the ther non owning spouse, for example, but 2 on title means both need consent and to be part to transactions.

 

[Terry_w]

I know it makes more sense for me to change the offer under my name only, but the fact the application has beenalready submitted makes it binding and hence harder to change without some legal implications. Hopefully tomorrow I will have a positive answer from the real estate and they let me change the name.

Imagine I managed to put the offer only under my name, in this case will I have to get the bank loan only under my name??? or can I still get a joint bank loan??? ie under my wife and my own name? I am asking this because our house is under both names and the bank may only see 50% of the equity if I apply by myself, Is this how it works?

What application? Loan applications have no relationship, directly, to the purchase, so you could still change contracts if offer not acccepted, and even if accepted depending on a few things. This will mean loan application may need to be changed but this is no big deal.

If one name is on title both spouses can be on the loan - but why would you want to put a non working spouse on the loan? Double the risk with no benefits. If should not be using the current home as security either as there are asset protection risks to consider - borrow separately against it.

 

[Scott No Mates]

heaps

for starters, What if you
die
lose mental capacity
go bankrupt
relationshipp break down
gambling problem
get a credit default and can't borrow.
stop working
sell

etc

This doesn't mean you shouldn't buy in one name, but need to consider the broader implications. legal owner can dispose or mortgage the property independant of the ther non owning spouse, for example, but 2 on title means both need consent and to be part to transactions.

Also, if it is to be an IP (at anytime in the future), CGT may also come into play - not a short term tax issue. If the +1 is on a low income, her CGT liability will be minimal.

 

[neK]

I know it makes more sense for me to change the offer under my name only, but the fact the application has beenalready submitted makes it binding and hence harder to change without some legal implications. Hopefully tomorrow I will have a positive answer from the real estate and they let me change the name.

Imagine I managed to put the offer only under my name, in this case will I have to get the bank loan only under my name??? or can I still get a joint bank loan??? ie under my wife and my own name? I am asking this because our house is under both names and the bank may only see 50% of the equity if I apply by myself, Is this how it works?

Vendor needs to agree with the change of name on contract (usually a yes)
Stat dec needs to be signed

All this can be handled by the solicitor for additional fee.

 

[RPI]

no brainer.. put it on your nam eand you should be fine. the tax bracket u are in will save more $$$.

the solicitor will re-direct you to tax agent and you will be lucky to get a good one.

think about this:

if you make $100k - tax rate is 35%
u get 35 cent back whatever u claim.

your wife only makes $25k so she can't claim it at all.

this is what i think.

what about if you sell and make a decent capital gain and then have to add it all to the high income earner's salary?

 

[Terry_w]

Speak to your lawyer. With spouses the names on the transfer does not have to be the same as the names on the ccontract. "transfr by direcction" i think it is called.