Changing title ratio...

From: Owen .


I have some friends who are in the process of buying their first IP and they were splitting the title 99%-1% in favour of the higher earner. The higher earner was just made redundant yesterday and they settle next week. How does that suck for timing!!!

They are trying to change the ratio to 50%-50% and were told buy their solicitor that because the stamp duty has already been paid they cannot because that would be a change of title and they would be liable for stamp duty again. However, they were also told that they could make a written "agreement" with each other witnessed by their accountant to say we were sharing the costs of the IP 50%-50% and therefore claim the tax refunds at a 50%-50% split. They are trying to get hold of their accountant to confirm this and I thought I would post this to see what you lot may know.

The solicitor reckoned if you explain to the tax office that you don't want to change the title deed because it would cost you too much they can't argue with that!!

Anyone heard of an agreement like this?


"Gambling promises the poor what property performs for the rich – something for nothing"
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Reply: 1
From: Duncan M

Hi Owen,

There's a great section in the Rental Property Guide from the ATO about
Partnerships and Equitable vs Legal Ownership.

I would suggest your solicitor has given your friends BAD advice in this
instance as their single holding of 1 property doesnt amount to the carrying
on of a Rental Property Business which is the only way that a Partnership
Agreement can skew the Equitable vs Legal Ownership.


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Reply: 2
From: Manny B

Howdy there,

I think Duncan is right there, get your solicitor to look at it again....

A few years back when I got married I added my wife's name to our PPOR title (as it was only on my name) & didn't cost much as it is a husband/wife situation... there was no need to pay any stamp duty, other than some small title's office fee & solicitor fee (oh yes, u need to inform the bank as well if you have a mortgage, but they don't have a problem with it), if I remember right, it was all under $500...

Good luck...


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Reply: 3
From: Tom Moschitz

Hi Owen,

What was the thinking surrounding the original decision to purchase the property 99-1.
Are they reacting too quickly to changing short term circumstances?
Looking at the bigger picture it may be worthwhile suggesting to stick to the original plan if that was well thought out and take a small hit short term.

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Reply: 3.1
From: Everett .

I recently asked my solicitor if using a 1%-99% split saved money if you wanted to rebalance at a latter date and she said no. This is contrary to an often sprouted good idea, has anyone got anything solid on this proving Owen's and my solicitors wrong.

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