I want to buy an IP jointly with an overseas family member(from China). I am an Australian citizen. Do they have to sign the contract in person or can they do it from overseas? And would they have to get any government approval from foreign investment review board?
Investing with JV partner from overseas
- Thread starter Williamyuan
- Start date
Also think about any financing issues and tax issues.
My solicitor has told me that in this situation (buying an existing property for investment, I'm a citizen, wife is permanent resident, parents in law are not residents, we want to all be on title), he would need to ask a contact in FIRB, but needs to have a specific property as done on case by case basis. He wants me to wait until I have negotiated the price on a property I want to buy, then tell him the details before I sign so he can ask FIRB if it would work or not.
I want to know in advance however if it would work, as my being able to purchase is conditional on my parents in law being on the title, and I don't want to try to negotiate the price without knowing I'd be able to go through with it.
Is it true that this would need to be determined on case to case basis?
Also what would this make finance difficult- intend to apply for mortgage with my wife and I's income.
I want to know in advance however if it would work, as my being able to purchase is conditional on my parents in law being on the title, and I don't want to try to negotiate the price without knowing I'd be able to go through with it.
Is it true that this would need to be determined on case to case basis?
Also what would this make finance difficult- intend to apply for mortgage with my wife and I's income.
Why do they have to be on title? Why not put them as unit holders in a unit trust with you and your wife as guarantors for the mortgage? That will avoid the majority of the non-resident issues (which banks hate lending too, generally speaking even if the non-resident adds nothing to the servicing equation).
Thanks for the unit trust suggestion, but have spoke to FIRB and was told non residents cannot own units in a trust that owns investment property in Australia..
Another option that my parents in law may agree to is that my wife could own the majority of the property, eg 80%, and 20% would be in my name.
I have 2 questions about this:
Can I get a loan with my wife earning 40% of income and me 60%, and her having 80% of title and me 20%? (The bank would still have first claim on the title in case of default so it shouldn't matter to them, right?)
In the case of a divorce, would what it says on the title be binding, or would we just be automatically considered to own 50% each unless we had a Family Law Financial Agreement?
Another option that my parents in law may agree to is that my wife could own the majority of the property, eg 80%, and 20% would be in my name.
I have 2 questions about this:
Can I get a loan with my wife earning 40% of income and me 60%, and her having 80% of title and me 20%? (The bank would still have first claim on the title in case of default so it shouldn't matter to them, right?)
In the case of a divorce, would what it says on the title be binding, or would we just be automatically considered to own 50% each unless we had a Family Law Financial Agreement?
Used a loan agreement which I drafted and got my solicitor to reword for a different property they gave us money for, they want to have something they would consider more legally 'substantial' before lending again for another one. My solicitor told me the first loan agreement was perfectly legally binding, but they want something that seems more formal.
Can they register a caveat/lien as a second claim after the bank's mortgage on the title?
My wife and I are both residents, and my parents in law cannot own part of the property under FIRB rules, why do I need a bank that is good for non-resident lending? I don't intend to tell the bank about the personal loan from parents in law, the borrowed money will just be used as part of the deposit with the source of the money remaining undisclosed as not applying for 95% loan requiring 'genuine savings'
Because if they insist on being on title the bank will require them as guarantors/borrowers which is a problem if the banks do not accept non-residents.
You could enter into a second mortgage agreement with them which remains unregistered. This interest can be noted by them lodging a caveat. So they would get some priority over other potential creditors (except the 1st mortgage).
But, consider what would happen if you wanted to increase the loan or sell the property.
So I could get the bank loan, and after that is approved they could then add their caveat, but the loan would have to be repaid and the caveat taken off before I could sell or refinance.. Ok, thanks a lot for your help.
So if Idon't lodge any caveat to the title, and my wife and I buy the property as tenants in common,would the tenants in common share be legally binding, or would we legally considered to own half each because we are married?
Also check your terms of the first mortgage would you need their permission to further mortgage the property, even if it is unregistered? They would be unlikely to find out, but technically I think you would be breaching the first agreement if you did this.
If you sell or refinance you don't necessarily need to repay the loan. They could consent to withdraw the caveat and then relodge it again.
It would be legal. But this doesn't mean it cannot be challenged or the parents couldn't get at you.
Take the example of the parents lending you and wife money with the wife taking an 80% share of the property. Money is not repaid and marriage breaks down. Parents could probably sue you, wife (their daughter!) or both of you for the return of the money - who do you think they will chase?
If relationship breaks down you could still go for a family law property settlement asking for more than 20% share.
Say you or wife dies. The survivor could make a claim for more money from the estate. NSW has laws which allow money to be taken from assets not owned directly such as a greater share in a tenants in common property - this is know as a notional estate order under the family provision sections of the Succession Act 2006.
Good, I want to make it safe from their point of view, I don't want them to think I'm trying to make some loophole for me to steal their money.
Is it possible for property to be in wife's name only, but I make most of the income for the loan application? Would it be that she was the primary loan applicant and I am a guarantor?
Yes. You could be guarantor or jointly on the loan.
