Making numerous financial decisions is a common part of starting a marriage or de facto partnership. The choice to own property is among the most important ones.

Although it’s normal practice, adding your spouse or de facto partner to your current property title is a serious decision. It may have significant effects on estate planning, taxes, and even your relationship with your spouse.

Prior to including your spouse on your property title, you should take into account the following important factors:

1.Legal Consequences
Understanding the various property co-ownership agreements you will engage into with your husband or de facto partner, as well as whether you will own the property as tenants in common or as joint tenants, is an essential first step.

2.Tax Repercussions
A Capital Gains Tax (CGT) event may arise and you may be required to pay CGT on the transfer if the value of your property has increased since you first bought it. Unless you are exempt, stamp duty may also be applicable in some situations.

3.Risk to Finance
You are essentially granting your partner a share of your property ownership when you include them on the title. Your property may be at risk if your partner has financial problems, such as bankruptcy or unpaid obligations. In order to collect any unpaid debts, creditors may be able to make a claim against your property.

You might have to renegotiate your house loan in order to include your partner if you have a mortgage on your property. Before granting the new loan, your lender might need to evaluate your partner’s financial risk.

4.Future and Estate Planning
If you decide to be joint tenants, your portion of the property will immediately pass to your partner upon your death, therefore you cannot leave it to someone else in your will. Tenants in common may be a preferable choice if you would rather be in charge of your portion.

Including your spouse on your property title could have an impact on your future financial goals, such taking out loans or purchasing more real estate. If both names appear on the property title, it may have an effect on your ability to borrow money, either positively or adversely.

5.Documentation and Legal Charges
There are legal documents and expenses involved in adding a spouse or de facto partner to a property title, such as conveyancing fees, registration fees at the land titles office, and maybe stamp duty.

The legal ramifications and required legal work associated with adding your partner to your property title can be discussed with our knowledgeable property experts. Our family law team can help you with any legally binding financial arrangement you may want to make on the terms of transfer, and our estate team can help you include the ownership interest in your estate plan.

Takeaways

It’s important to think carefully before adding your spouse or de facto partner to your property title. Make sure your choice is well-informed, appropriate for your situation, and consistent with your long-term financial objectives.

Since each couple’s circumstances are different, what works for one pair could not work for another. Make the choice that is best for you both, do your research, and get expert guidance. leave a lasting legacy for your loved ones.