How to purchase property as a couple but keep one name on the property title

Partners, siblings, or friends may buy a property together for many reasons, like sharing the deposit or increasing their borrowing capacity. In Australia, you can co-own a property as “tenants in common” or “joint tenants”, which can affect how the property’s ownership can be transferred in the future. 

Regardless of the ownership structure you choose, lenders generally prefer to have all parties named on the mortgage also named on the property title.

If you apply for a joint mortgage but decide to not include your name on the property title or deed, you cannot be considered a legal owner of the property, even though you might be responsible for repaying the loan. 

Lenders may accept two borrowers on a mortgage when only one name is on the property title if the person unnamed on the title still benefits from the loan. This could include tax benefits for high-income earners, or asset protection for occupations susceptible to lawsuits or where creditors may be involved. However, a lender will be concerned if there is no benefit to one borrower.

Some lenders may see the second borrower as a guarantor rather than an equal borrower. This means the responsibility for repayments would fall to the person named on the title, not both parties equally. If this is the case, you also won’t have any legal claim on the property as you’re not a named borrower or named on the property title.

Unlike a co-borrower, a guarantor isn’t legally liable to make monthly repayments with other borrowers. If you enter such an arrangement, you may only be required to make repayments if the person named on the title defaults on the repayment. 

The exact rules vary from one lender to another, and you should check the specific lending policy of any lender before making your decision.

Tax advantages

If you’re a high-income earner and your name is on the title, and the property is used for investment purposes, you may be eligible to claim tax benefits. 

These could include:

• depreciation benefits like fixtures and fittings
• agent and body corporate fees
• council rates, and
• interest on the mortgage.

Keeping just one name on the title rather than two means that one person can benefit from 100% of the deductions, rather than dividing them up. This could significantly reduce one person’s taxable income and increase the cash flow for your household and other expenses.

Another consideration is the land tax, a state-levied tax payable by investment property owners for properties that aren’t their primary residence. Applying for a joint mortgage but with a single name on the deed could save you from paying unnecessary land tax.

Consult a tax accountant for more information on potential tax advantages.

Asset protection

Having only one name on the title could help protect your property from creditors if you’re party to a lawsuit that doesn’t favour you. Such lawsuits could give creditors the right to make claims against all your assets; however, not being named on the title could help to protect the property. 

Consult a legal professional for more information on asset protection strategies.

There may be some risks if you’re a borrower but don’t have your name on the property deed:

• The legal owner named on the property title could sell the house without your consent since you aren’t a legal owner.
• The procedure to modify the title in the future can be both complicated and expensive. 

If you’re looking for a joint mortgage with a single owner on the title, it may be best to seek professional financial and legal advice before making a purchase. For example, you could consider speaking with an experienced mortgage broker who understands your requirements and can help you find the most efficient structure.