Loan structure for PPoR (tax)

Hi,

I'm trying to buy my first property and use it as PPoR, my idea is, in a few years down the track to rent it out as an IP. My wife doesn't work for the time being therefore receives no income.

Can anyone please advise if the property should be put under joint names or just me? My solicitor has advised me that legally there is no real difference therefore I'm more after potential tax consequences.

Thanks.
 
Hi there

Talk to an accountant about the ownership split/structure.

In terms of the loan. I'd set it up as interest only with an offset rather than P&I. You want to avoid paying down the principle on the loan if it's going to become an investment property in the future. Instead, utilise the offset account and park all of your spare savings in there.

Cheers

Jamie
 
Hi there

Talk to an accountant about the ownership split/structure.

In terms of the loan. I'd set it up as interest only with an offset rather than P&I. You want to avoid paying down the principle on the loan if it's going to become an investment property in the future. Instead, utilise the offset account and park all of your spare savings in there.

Cheers

Jamie

Thanks Jamie.

I have a meeting with my accountant tomorrow. Could it be possible for the more experienced people around here to give some advice tax-wise so I can discuss options when I meet my accountant?
 
The simple approach is to consider two things.

Will the property be positive or negatively geared once it becomes an IP?

If negative, then it's ideal to have ownership (or the majority portion) in the highest income earners name.

If positively geared - than it's ideal to have ownership (or the majority portion) in the lowest income earners name.

However, keep in mind that properties that start of negative tend to turn positive after a while as rents increase over time.

This is a very simplistic answer - and is only taking into account ownership under your personal names.

Cheers

Jamie
 
unit trust perhaps, but without knowing your resources and goals its a little tough, with land tax implications and other issues

There is no RIGHT soln, only a best compromise

ta
rolf
 
Hi,

I'm trying to buy my first property and use it as PPoR, my idea is, in a few years down the track to rent it out as an IP. My wife doesn't work for the time being therefore receives no income.

Can anyone please advise if the property should be put under joint names or just me? My solicitor has advised me that legally there is no real difference therefore I'm more after potential tax consequences.

Thanks.

Bad solicitor. His advice is incorrect there are many many differences. It is negligent advice.
 
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