WHAT NAME COULD I BUY AN INVESTMENT PROPERTY IN?
How you structure property ownership can affect your tax benefits, legal position and relationships.
Choosing the right ownership structure
Before signing on the dotted line, it’s worth taking professional advice from your tax adviser and legal agent. They can help you work out the most suitable ownership structure for your investment property.
Owning investment property in a single name
Some general advantages:
- You get to make all the loan and property decisions
- Option to have up to 10 offset accounts linked to one loan.
Some general considerations:
- You’re solely responsible for the loan repayments
- Only you have access to your loan accounts and any linked offsets
- Ownership structure could be different from the loan structure: chat with a lender and your tax adviser.
Investing with a co-owner
You could share ownership with a trusted partner, friend or family member.
Some general advantages:
- Could afford a higher value property, or multiple investment properties
- Lower costs per individual, as they’re shared between investors
- Two minds can be better than one
- Option to have up to 10 offset accounts linked to one loan.
Some general considerations:
- Disagreements, relationship breakdown
- Less share of the income/capital growth
- Both parties have access to the joint loan accounts and any linked offsets in joint names
- Change of plan or an unforeseen event: you can’t sell half a property, so you may need to sell or have one party buy the other out
- If your investment includes a gearing strategy, speak with your tax adviser
- Independent legal advice can be a smart idea for both parties.
Owning investment property as a group
Westpac group lending offers 2-9 property investors a way to split the cost of buying and co-owning a property. Talk with your lender, tax adviser and legal agent about the added complexities of structuring ownership this way.
All parties on the loan are joint borrowers.
All parties are responsible for the entire debt.
Owning property within a trust
A family trust is a legal structure allowing one or more family members to manage property for another family member’s benefit. Due to their complexity, you should, of course, look at getting legal and tax advice.
Some general advantages:
- Potential to protect family assets from bankruptcy
- Ownership isn't tied to an individual and can be passed onto other family members
- Possible flexibility when sharing income and capital gains between family members.
Some general considerations:
- Up front and ongoing tax adviser and solicitor fees
- Ongoing personal admin
- Can only distribute profits, not losses
- You'll need a trust deed to set one up.
Owning property in a company name
Weigh up the tax pros and cons with your tax adviser. Your local Westpac business Property Specialist can walk you through your site finance and business growth options.
Buying property when you're self-employed
If you're buying property in your personal name, you can apply for the same Westpac residential investment home loans, offers and rates as salary-earners.
And if you qualify for our Fast Track assessment, all you need to provide is your two most recent personal ATO Notices of Assessment.
Investing through a self-managed super fund
There are strict rules, costs and risks involved with investing in residential property through a self-managed super fund. For example, assets in super funds can’t be used for personal use. Weigh up the pros and cons with your tax adviser.
Ask about your tailored rate
One conversation could save you 1000s
Book an appointment about our sweet rates, or start applying online and a lender will be in touch. They can tailor a variable investor rate with offset, just for you and your co-owners.
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Can I buy a house in my child's name?
Depending on your personal circumstances, buying property in your adult child's name could provide a form of asset protection. First, seek professional advice from your tax adviser and lawyer on tax effectiveness and working out the correct ownership structure.
What’s the difference between ‘joint tenants’ and ‘tenants in common’?
Joint investment property ownership is where two or more people buy a property together, and have their names on the title. Talk with your tax adviser and legal agent about the Land Tax, Income Tax and Capital Gains Tax differences.
- Joint tenancy shares equal ownership of the property with others, and is common among married couples. When one dies, the surviving tenant assumes full ownership.
- Tenancy in common shares ownership (it doesn’t have to be equal shares) of the property based on a legal agreement, with ownership then distributed according to each person's will.
Can being in a de facto relationship affect property ownership?
Depending on the state or territory, if someone individually owns property, their de facto partner may be able to claim ownership of a portion of the property if the relationship ends. To find out more, seek legal advice and refer to the Government de facto property regime .
Things you should know
Conditions, credit criteria, fees and charges apply. Residential lending is not available for Non-Australian Resident borrowers.
This information is general in nature and has been prepared without taking your personal objectives, circumstances and needs into account. You should consider the appropriateness of the information to your own circumstances and, if necessary, seek appropriate professional advice.
The taxation position described is a general statement and should only be used as a guide. It does not constitute tax advice and is based on current tax laws and their interpretation.
Taxation considerations in this publication should not be interpreted or used as tax advice or a tax guide.