11 JulHow to buy property

When we talk property and we talk how to buy property what do we do?


The first and easiest question is just buy it in our name, be that as single person or husband and wife. This alone is fraught with implications. How do we split the ownership? This split can influence your returns for the good and the bad.


Let’s consider John and Jane. John decided to stay at home and be the parent as his income was less, Jane a professional on a great salary in the 38% tax bracket stayed at work. They anticipated this to be the situation for the next 10 years. Jane was also annoyed at the tax she paid and wanted to look at property to reduce her tax payable.


John and Jane however went 50-50 on the contract meaning Jane would lose half of the tax benefits in rental losses as they would pass on to her husband even though he will gain no benefit. The flip side to this is 50% of the capital gain will also go to John, so if the property is sold whilst he is still a stay at home day, then tax will be reduce.


No person in this situation is the same. Ensure when you decide to enter into the property market you not only think for now but think for the future, whilst it can be unknown we have to plan for all aspects of investing.