Hi guys - you all seem pretty helpful and knowledgable when it comes to advice. My partner and I are considering buying our first property - the question is whether we should:
Any benefits around either? We're both still at home and looking to move out soon-ish, so this is probably another big factor.
Any thoughts / input? Cheers!
Before buying together have you two lived together?
Not in the traditional sense. We've travelled overseas for around 4 months together.
if you got along together while travelling overseas is a start.
You would've actually seen more of each other day to day other than living together where one goes to work etc.
Try renting together in a location you would like to live and then decide.
"Those who travel together, stay together"
I say go for it, team up and never look back.
Thanks for the optimism :)
If you can get a good ones with growth potential, buy one each (so two properties total, one yours, the other one your partners) and stay there for min 6 months before living together.
Thanks for your input! Any reasons behind your thoughts?
This is so that both of the property can still be sold as principal residents. That is, they do not attract capital gain tax. After two people have lived together/married, for any purchases afterwards, only one property can be calculated as principal resident for a specific period in time.
Of course, this is assuming that the value increases in years to come..
See https://www.ato.gov.au/General/Capital-gains-tax/In-detail/R…
I could be totally wrong though.
In addition, each of you individually can also take advantage of the first home grant.
This is true but I would not do anything for the sole reason of obtaining a tax benefit.
Tax benefits should be seen as a bonus you receive as part of your investment journey but not as a strategy.
I.e. investing in negatively geared properties for the sole reason of obtaining a tax deduction is a false economy.
On a second thought, maybe I misunderstood the question. Can you clarify on what you mean by "Buy 1" and "Buy 2"?
Thanks for your thoughts! To clarify, buy one combined (with the both of us paying it off) or buy one each (paying it off separately).
Seeing it's your first purchase I would suggest option 1; buying only one property and minimising your loan.
Reasoning:
- First property is generally entering the market & residing with your partner
- Once you've lived for a few years in a place you'll have a better idea of what you want in a property
- You'll likely have more major expenses in the coming years; engagement, marriage, kids, upgraded cars
- Whilst young make the most of your free time and travel
- Interest rates are very low and at some point will rise to 6-8%
By taking a 5 year approach you can focus on aggressively paying down your first place which will set you up for your second.
When you get to your second house you may be thinking location, schools, bedrooms for kids, jobs, etc.
By nailing the first you will have much greater flexibility when you buy the second and you may be able to hold your first as an investment property.
Good luck!
Thanks for your input! Helpful stuff to consider.
Always buy alone. Makes things cleaner and at the end of the day if it's meant to be it will be your partners anyway in the end…
or after 6 months half if de facto…
Not unless you're prepared to both sign a prenuptial agreement.
I won't bore you all with the details of my story but knowing what I know now, I'd never in a million years enter into another living arrangement or financial debt with another person without everything written down. As to what belongs to whom.
It's got nothing to do with loving someone. The reality is, you never, ever know someone, no matter how much you think you do.
Personally, I'd keep it clean.
Finances in my world stay separate.
Good Advice
Look for growth potential ( land size, near good schools etc…) and also where you prefer to live because you are going to be staying there for a while , unless you are renting it out ( as an investment property).