Hi Everyone,
I?m seeking some advice on how best to structure a partnership with a friend of mine ? our intent is to buy, renovate and subdivide a property with my family and I living in the property and me doing the bulk of the renos over 12 months (to avoid capital gains tax). We would like to do this several times over the next five years or so.
Due to a failed business a few years back I have no deposit and bad credit whereas my friend has a deposit and good credit. We?re both professionally employed (I?m on wages, he owns his own business with his wife) and both have respectable incomes (though I?ve been paying off the failed business, thus no deposit). My friend is happy to cover the deposit however it?s how to structure things from there that I?m keen to get some advice on.
My initial thoughts were that my friend could purchase the property outright and I would then pay minimal rent on the property (minimal to negatively gear and increase the tax benefits for my friend). I would do and pay for the bulk of the renos (have trade skills), contribute to the subdivision costs and then repay any remaining debt to my friend when we sell the property.
My friend suggested that we might be better off registering a business and formalising a joint venture but neither of us know enough about that to understand the pros and cons.
Any and all advice on this would be very gratefully received.
Thanks,
Warren
I?m seeking some advice on how best to structure a partnership with a friend of mine ? our intent is to buy, renovate and subdivide a property with my family and I living in the property and me doing the bulk of the renos over 12 months (to avoid capital gains tax). We would like to do this several times over the next five years or so.
Due to a failed business a few years back I have no deposit and bad credit whereas my friend has a deposit and good credit. We?re both professionally employed (I?m on wages, he owns his own business with his wife) and both have respectable incomes (though I?ve been paying off the failed business, thus no deposit). My friend is happy to cover the deposit however it?s how to structure things from there that I?m keen to get some advice on.
My initial thoughts were that my friend could purchase the property outright and I would then pay minimal rent on the property (minimal to negatively gear and increase the tax benefits for my friend). I would do and pay for the bulk of the renos (have trade skills), contribute to the subdivision costs and then repay any remaining debt to my friend when we sell the property.
My friend suggested that we might be better off registering a business and formalising a joint venture but neither of us know enough about that to understand the pros and cons.
Any and all advice on this would be very gratefully received.
Thanks,
Warren