Joint mortgage and sole property owner situation

[kokonaing]

Hi,
My wife and I have joint mortgage on an investment property, but the title is under her name only. How does this situation work on tax time? Can I deduct all the interests, expenses, when I do tax refund? As she is the title holder and sole landlord in rent agreement, is she the only one who can deduct/pay everything related to the property, including the interests on the joint mortgage?

 

[Terry_w]

Hi,
My wife and I have joint mortgage on an investment property, but the title is under her name only. How does this situation work on tax time? Can I deduct all the interests, expenses, when I do tax refund? As she is the title holder and sole landlord in rent agreement, is she the only one who can deduct/pay everything related to the property, including the interests on the joint mortgage?

She is the owner so she would be able to claim, but you couldnt

 

[kokonaing]

She is the owner so she would be able to claim, but you couldnt

Thanks for your prompt reply, Terry.

Would she be able to claim full 100% of interests from the joint mortgage?

 

[Peter_Tersteeg]

Generally all income, interest, expenses, everything tax related would be assigned to the sole owner.

 

[kokonaing]

Thanks, Peter. It's good to know that.

 

[Terry_w]

Thanks for your prompt reply, Terry.

Would she be able to claim full 100% of interests from the joint mortgage?

Unless there is a partnership or trust aspect then usually yes.

 

[Paul@PFI]

The titled owners claim all income and deductions in that same % unless the property is a partnership / trust / business asset in which case another % may prevail. That's fairly rare.

 

[kokonaing]

As a newbie investor, I accidentally purchased landlord insurances for both IPs under my name, where the titled owner is my wife.

Does it matter when we lodge the tax return? Or do I have to request the insurance company to change the name?

Thanks in advance!

 

[Terry_w]

As a newbie investor, I accidentally purchased landlord insurances for both IPs under my name, where the titled owner is my wife.

Does it matter when we lodge the tax return? Or do I have to request the insurance company to change the name?

Thanks in advance!

You should fix this up asap

 

[Paul@PFI]

As a newbie investor, I accidentally purchased landlord insurances for both IPs under my name, where the titled owner is my wife.

Does it matter when we lodge the tax return? Or do I have to request the insurance company to change the name?

Thanks in advance!

This could affect a claim. Tell insurer and should pose no issue for them to reissue in her name. Of course for privacy reason they may not want to speak to you now. You don't own it. So who can change the policy ??

 

[kokonaing]

Hi,
Does it also apply to other expenses such as depreciation report, building inspection? All the invoices were issued under my name, as I was the one who did the calls and made appointments and all that. But my wife is the title owner and both of us are under the mortgage. Will ATO satisfy that the expenses are really for the property and they are genuine.

 

[Paul@PFI]

All expenses and outgoings are based on title. Nobody cares who paid it or what share. However in an audit the ATO may seek evidence a cost was incurred and actually paid.

Your evidence of payment will satisfy the substantiation requirements for her deduction.

 

[kokonaing]

Nobody cares who paid it or what share.

That's what I am thinking too. Nobody should care who paid it. If it is for the expense for income production, it should be considered deductible from ATO point of view.

 

[jrc]

The issue with the insurance though is that you probably do not have an insurable interest. Your wife as title holder and the bank as mortgagee do. Get thus fixed immediately.