How can I claim 100% of investment expenses, when in 50/50 joint venture

Hi everyone,

My father has purchased two properties off the plan (Barangaroo and Surrey Hills) which settle in December 2015. I am entering into a partnership with my father, providing 50% of the deposit on settlement and, due to my high salary, I will be paying the recurring expenses.

I want to claim all expenses (mortgage, strata fees, etc) in my tax return to maximise the negative gearing benefits. However I believe a simple 50/50 ownership structure with my father will mean I can only claim 50% of the expenses.

I have two questions I am keen for your help with:
1) How can my father and I set up a structure of ownership that allows me to claim 100% of expenses on my tax return, but splits debts/profit shares between us?
2) I will need to speak to a professional to obtain advise I can act on. What type of professional is best to speak to? e.g. accountant, property lawyer, etc?
 
Hi everyone,

My father has purchased two properties off the plan (Barangaroo and Surrey Hills) which settle in December 2015. I am entering into a partnership with my father, providing 50% of the deposit on settlement and, due to my high salary, I will be paying the recurring expenses.

I want to claim all expenses (mortgage, strata fees, etc) in my tax return to maximise the negative gearing benefits. However I believe a simple 50/50 ownership structure with my father will mean I can only claim 50% of the expenses.

I have two questions I am keen for your help with:
1) How can my father and I set up a structure of ownership that allows me to claim 100% of expenses on my tax return, but splits debts/profit shares between us?
2) I will need to speak to a professional to obtain advise I can act on. What type of professional is best to speak to? e.g. accountant, property lawyer, etc?

1) you buy your father's 50% share.
2. Yes. Lawyer
 
Whos name is on the otp contract? Whos name will be on the titles? If your not on it, you can't claim anything.


Thank you for letting me know this. We are thinking of setting up a company in both our names to own the properties (+ invest in more down the track), which I assume would need to go on the titles.

Either way I will be sure to raise these questions when seeking professional advise, thank you.
 
1) you buy your father's 50% share.
2. Yes. Lawyer

1) I do not have enough capital to buy out my father. Also I do not want to own his 50%, I want him to provide capital (and receive 50% profit share) as our setup allows us to combine our strengths: he has a large amount of capital but low salary while I have limited capital but I'm earning a good salary.

2) Thank you. What type of lawyer in particular? A property lawyer? Tax lawyer?
 
Thank you for letting me know this. We are thinking of setting up a company in both our names to own the properties (+ invest in more down the track), which I assume would need to go on the titles.

Not smart. You can't expense against personal income, and the company doesn't get the 50% CG discount.

Your father has already signed a contract? Who's name is on the contract?

1) I do not have enough capital to buy out my father. Also I do not want to own his 50%, I want him to provide capital (and receive 50% profit share) as our setup allows us to combine our strengths: he has a large amount of capital but low salary while I have limited capital but I'm earning a good salary.

You don't get to split profit and expenses unless your on the title.
 
Thanks Terry. I'll reach out to colleagues for references, however if anyone on these forums knows of anybody, please feel free to PM me (unless that is against any forum rules).

If anyone has any more feedback or insight on my OP, please add your thoughts, it will help me identify the right questions I need to ask. This issue is well outsite my knowledge (and google hasn't proved helpful either!).

Cheers.
 
Thanks Terry. I'll reach out to colleagues for references, however if anyone on these forums knows of anybody, please feel free to PM me (unless that is against any forum rules).

If anyone has any more feedback or insight on my OP, please add your thoughts, it will help me identify the right questions I need to ask. This issue is well outsite my knowledge (and google hasn't proved helpful either!).

Cheers.

A NSW land tax UT may be the right structure - Perhaps TWO to double dip thresholds for land tax if its done correctly. Need to consider you and Dad's position. Perhaps use a company is another option...One for each property with two LT thresholds ? Stamp duty issues ?? Possible this can be addressed.
 
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