Posted on: 25-05-15 22:42:40
Hi,
I am planning to buy a rental property between me and my brother. Basically we are 50-50 partners. My wife is also part of the application to strengthen the mortgage application. When I start getting rent I want to show major chunk of the revenues under her name so basically i want 10% or less income from Rental property my wife would be taking the balance which is 40% here and remaining 50% would be my brother's income. How to do this? Does this needs to be specified in the registration papers. Please help
Quote:
Originally posted by vivek901
Hi,
I am planning to buy a rental property between me and my brother. Basically we are 50-50 partners. My wife is also part of the application to strengthen the mortgage application. When I start getting rent I want to show major chunk of the revenues under her name so basically i want 10% or less income from Rental property my wife would be taking the balance which is 40% here and remaining 50% would be my brother's income. How to do this? Does this needs to be specified in the registration papers. Please help
You should talk to your lawyer about this. One way of doing this could be that you decide the percentage of ownership in the property and let the lawyer know about the same and he will register the title with the same percentage.
Generally when you are buying a rental property with a partner or partners, you all would be signing legal documents as "Tenants in Common" and then you can decide percentage of ownership in the property. Say 1% for you, 49% for your wife and 50% for your brother. So, when you claim Rental income or expenses you would use the same ratio in your tax return. To strengthen this, you may want to draw up a separate contract between you three deciding the percentage of ownership so that you have proof should CRA asks for the same some time in future. Still, your lawyer would be best bet to answer this in legal terms.
-----------------------------------------------------------------
Pramod Chopra
Senior Mortgage Consultant
Mortgage Alliance Company of Canada
