2 Properties - Buying two properties - better as 2 singles or as married?

Hi All,
Any help here would be much appreciated.

The goal: My girlfriend and I are considering purchasing two properties. i.e. an apartment at around $250,000, AND a house at around $500k to $550k. We are currently financially independent but are considering getting married in the next year or so. We would ideally like to buy one each, but trying to work out if this is possible or financially viable.

Her taxable income for the last financial year was $41,000. He has no dependents, no debts, perfect credit history and minimal living expenses. She is an Australian resident but not a citizen.

Options being considered : We are trying to decide on the following (or any other) options:

OPTION 1) Buy each of these individually,
a) as they become available (noting that she has put me as a spouse on her recent tax return, in case that makes this option ineligible).

And possibly:
1b) Purchase the owner occupied (first one) as mine, and the investment property (second one) as hers.

OPTION 2) Become a spouse (get married) and
2a) Choose one house now and one in the coming months, and apply for either one loan amount of 750k to split over two properties;
OR
2b) Apply for two loan amounts (eg 500k + 750k) (one now, one in the coming months).
2c) claim the rent off the second house as extra income (not quite sure the pros and cons of this)

Main question 1: which of these would be the best option?

My understanding from speaking to the mortgage broker is that:

My understanding of Option 1 (my preferred option)
As of about 6-8 weeks ago, it was indicated to me that I should be able to obtain finance of about $390,000. In addition to my deposit, this should allow me to purchase a property of about $520,000. My understanding is that this was based on me not having a spouse – noting that my girlfriend and I are entirely financially independent. My financial at the current time is pretty similar to what it was then, so I will hope that OPTION A remains current – i.e. purchasing a home for around $500,000 independently (and obtaining the first home buyers’ stamp duty concession). I hate to say it, but I also wonder if this option would lead to easier separation of assetts if I do this before marriage and if the marriage doesn’t work out.

Question 2 My interpretation of my discussion with the mortgage broker is that purchasing individually for us each to receive the first owner-occupied home stamp duty concession would not work, though I am not entirely sure on the reason why, and am hoping someone can explain that to me.

My understanding of Option 2 (recommended to me by mortgage broker as explained below is that):
-Assuming OPTION 2 is chosen: It would make more financial sense to choose the first property as owner-occupied, and the second as investment (although I assume that this can be reversed in the future ?), primarily because we could get the stamp-duty concession on the first house and tax-breaks on the second.

  • Our combined borrowing capacity would be higher than the sum of our 2 individual borrowing capacities (although I am not entirely sure how relevant this is given that the indicated individual borrowing capacities meet our needs

-It seems to me that we would getter tax concessions from having an owner occupied house and an investment propery TOGETHER (rather than one of them each).

I run my own business which is only 1.5 years in, so my mortgage broker says my only option would be a low-doc loan, which I presume means higher interest.

As soon as I get some clarification on this, I will decide on either OPTION 1 or 2.

Comments

  • -6

    Buy individually and have mortgages individually - lots more legal flexibility. Research into asset protection strategies involving this structure

    A few years ago there were things like FHOGs / stamp duty exemptions, my wife and I took adv of that by buying individually - dunno if this is still available, research into any incentives you can capture twice instead of once

    Also… maybe consider never getting married legally - just have the wedding as per normal but never marry. Then when you guys have kids she can get single mother benefits / rent assistance / FTB etc etc. Also you will have TWO PPORs and therefore benefit from TWO CGT exemptions instead of one. So good!

    Actually the paragraph above is half sarcastic but totally possible - depends how far you wanna push it. If you totally trust your wife, legal marriage has no upsides and plenty of downsides. But of course… someone will get royally screwed if divorce

    • while he got negatived
      i know people who do this, very sad and bad for us tax payers!

    • just have the wedding as per normal but never marry. Then when you guys have kids she can get single mother benefits

      Centrelink will class you as defacto, you are not exploiting a loophole but actually doing something illegal.

      • Nothing illegal here, everything would be consider as defacto relationship according to taxation law if you not married. But sadly this is possible if both you and your partner can get a loan 500k+ each, lucky bastards :)

        • Sorry - What is not possible if the loan is over 500k?

        • @richieisnow
          To get a 500K+ loan, you need at least 100k+ single annual income, not everyone can do that. :)
          just a figure. Usually you need a joint loan so you can borrow more.

          Seriously, I don't know why people negative all these comments, nothing illegal here unless someone commenting which part of the law anyone breaking rather than negative comments.

      • +2

        yes defacto if you're dumb enough to leave a paper trail / declare it. The facts are pretty easy to hide - what one would do in this setting is keep the relationship nonexistent on paper and then the woman can rent off the guy to get rent assist, while the guy probably negatively gear his home if he sets his own bills to go to a different address (e.g. his parents)

        There's SO much scope to rort things.

        And I love how butthurt people are from the downvotes I'm getting - keep em coming.

        • i +++++ you! too much tax to pay here

      • Is there any difference between being defacto and married? In terms of tax, gst etc?

        • NO, Tax man is smart, doesn't matter if you married or not, or gay or lesbian, if you are living together,
          "you were in a relationship with that was registered under a prescribed state or territory law
          or although not legally married to you, lived with you on a genuine domestic basis in a relationship as a couple."
          you pay tax as same.

    • Im guessing you're happy to chip in OPs single mothers benefits, rent assistance etc. Since you're so generous, please send me some money for rent assistance too.

      • How would they get rent assistance for a property they own? I don't think they shell out "mortgage assistance" do they?

        • The point was any kind of tax funded centrelink benefits

  • -5

    Thanks Echelon46, a few things to think about there..

    • -3

      You prob can x2 new home owner grants, I bet that is possible too ? :)

    • haha! i hope you don't actually do the things I suggested

    • +1

      Why the negs? Not trying to do anything illegal.

  • +2

    This convoluted question has made it into the examiner's books for an Accounting subject unit.

    • Did any one successfully answered it yet? or even made an attempt to do so?
      Sorry mate, dont have an answer for you, but waiting for it.

  • -1

    Ask the barefoot Investor Scott Pape.

  • +1

    I am just wondering why my comment got so many negs when I was just thinking someone for their input? I am not trying to to anything dodgy or illegal. Anyways, thanks again to those who helped out

    • +1

      Your comment kind of suggest that you may try those dodgy acts out - thinking about it

      • Yes I can see that now

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