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Joint ownership of investment property

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Marty | 14 May 2016, 08:51 AM Agree 0
My husband and I recently relocated interstate from Perth to QLD. Due to the slump in the Perth property market we couldn't sell our house without losing money. We found tenants and have been renting here in QLD.
Being first time investment property owners I'm looking for some advice:
1. We have a a single income household but the property is in both names. Do we have to halve all costs in our tax returns? Is there any way around using the full benefit of negative gearing on the main income earner?
2. Going forward is it worth keeping the Perth property until the market picks up or sell when the lease comes up in September and cut our losses?

  • Nav | 18 May 2016, 10:31 AM Agree 0
    Hi Marty

    1. If the initial property purchase was done in joint names, than the rental income/expenses have to be allocated accordingly, i.e. 50-50.

    2. By the sounds of it, the Perth property was your main residence, and will continue do remain as such for 6 years after you vacate the property. This rule applies even if you are deriving rental income from the Perth property. Note that you cannot own another property and treat that new property as a main residence i.e. this rule only works if you are renting in QLD and will do so for the future.

    The main residence exemption means that no tax will be payable on the sale of the property as long as the above holds true. The rules are quite stringent so seek advice.

    But if the above facts hold up, I would hold for Perth market to turn around.

    • Marty | 18 May 2016, 10:34 AM Agree 0
      Thanks so much for your response Nav, lets just hope the Perth market does turn soon. What are your thoughts? Are things looking up there yet?
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