Property purchases for a home or an investment property

From January 1, 2019 The Australian Prudential Regulation Authority (APRA) has given approval to allow for the banks to now lend again on an interest only basis for 1 – 5 years.

The interest rate is generally higher for interest only loans and investment property loans, but this can be a useful stepping stone to get into the property market. Strategic planning for a growing family and the future need for a bigger family home should ideally be planned a couple of years in advance. Our careful tax planning and budget management can help a family acquire, rent and in a couple of years move into this larger home after use of the tax savings and possible property increase to their advantage.

The original smaller home could be used in a couple of different ways depending on the ownership structure or the title structure. A property can be purchased as joint tenants or tenants in common. Tenants in common allows each owner to have their percentage of ownership as a Willable asset. Joint tenants on the title is not a Willable asset in that the surviving partner inherits the other half ownership.

In some cases, it may be worthwhile for changes to the title of the original house. This would depend on whether it would be better for tax purposes to have the title in one partners’ name over the other, or joint title, or tenants in common.

Talk to us to discuss further.