how does negative gearing work with partners?

[alpina]

hi all,

curious to know how negative gearing works with partners?

for eg, if i was to buy a property with a friends for $300k and we both put in $150k, can we both claims our portion for negatively geared purposes?

regards,

julie

 

[Simon]

Yes.

You would have your costs apportioned by 50%. Then whatever you make/earn (your 50%) on it is declared/claimed on your tax return.

Easy peasy lemon squeezy ...

 

[geoffw]

The neg gearing is OK...

But then there's the possibility of "jointly and separately liable".

If you don't structure it right, you have the possibility that, for the next purchase, that you will be assessed the whole loan for exposure- (and perhaps servicibility as well?). The bank assumes that either partner could default, and therefore you coul be liable for the entire loan.

 

[jingo]

The neg gearing is OK...

But then there's the possibility of "jointly and separately liable".

If you don't structure it right, you have the possibility that, for the next purchase, that you will be assessed the whole loan for exposure- (and perhaps servicibility as well?). The bank assumes that either partner could default, and therefore you coul be liable for the entire loan.

Hi Geoffw,

Being assessed for the whole loan exposure is certainly a disadvantage in buying properties with multiple people. My partner, brother in law and myself went in together on a property a few years ago. As we share 1/3 each, the partnership hasn't hurt my partner and I too much, but the bank has viewed my brother in law as being exposed to the whole loan rather than just his 1/3 share.

Fortunately though he has a high income and is able to keep buying. But this is something we were unaware of at the time we purchased.