Are you only dreaming of purchasing a property with your partner in 2023 and still staying in the dark about its benefits?
Almost all home buyers today, especially married couples, are opting for joint ownership of property. Joint ownership of a property is considered as a common way to enter the property market especially for those who want to buy to occupy, thus it can be counted as a key milestone for any couples.
Owning a joint property with a spouse offers numerous benefits such as better Home Loan terms, easy succession, and many more. It allows for shared financial responsibility, by pooling resources with another person, the financial burden of owning a property can be divided, making it more affordable and manageable. Among the several advantages, here are some key benefits for couples who jointly own property in Australia.
Shared Financial Responsibility: Joint ownership allows both couples to share the financial responsibility of purchasing and maintaining the property. It helps ease the burden of expenses such as mortgage payments, property taxes, insurance, and maintenance costs.
Increased borrowing capacity: Joint ownership accesses the increment on borrowing capacity, by combining both couples incomes and assets, making it easier to obtain financing for the property. Lenders consider both individuals’ incomes and credit histories, which may increase the chances of securing a larger loan or better interest rates.
Capital Gains Tax Exemptions: In Australia, Joint ownership allows both couples to benefit from numerous tax advantages. Couples are eligible for capital gains tax exemptions when selling their principal place of residence. This indicates that the profit made from the sale of the property may be tax-free, provided certain criteria are met. Plus if one partner earns more than the other, you may be able to claim a larger share of the property’s negative gearing deductions.
Ease of Estate Planning: If one partner passes away, the other partner will automatically inherit the share of the property. Joint ownership simplifies estate planning and ensures that the property will not have to go through the probate process, which can be time-consuming and expensive. This provides peace of mind and streamline the transfer of assets to the surviving spouse.
The type of joint ownership: Aussies property market practices two main types of joint ownership; joint tenancy and tenancy in common. You’ll get to choose any kind of ownership aligning your expectations and requirements which will have implications for how the property is managed and how it is distributed in the event of demise or separation.
Family Protection: Joint ownership ensures that both couples have a legal claim to the property. It could be beneficial in cases of separation or divorce, as it ensures that both parties have a fair share in the property’s value, subject to applicable property settlement laws.
Asset Protection: Joint ownership provides asset protection for both couples. In the occasions of financial difficulties or insolvency of one spouse, having the property jointly owned may offer some protection against creditors’ claims, as it is considered a shared asset.
Overall, there are many advantages to couples jointly owning property in Australia. However, it is crucial to weigh the pros and cons carefully before deciding to pool your money. If you are considering buying property with your partner, it’s always a good idea to speak to a financial advisor to get professional advice. Active Mortgage and Finance provides you the exceptional financial advisors & experts in Australia for your any kinds of queries.Get in touch with us.