News & Articles 4 Major Issues of Joint House Ownership
4 Major Issues of Joint House Ownership
7 Sep 2016
1. Joint loan affects amount of loan obtained
Many people thought that a joint loan application has a higher approval rate, but if one person's income is sufficient, having 2 names in the loan application will limit the amount of loan approved. This is due to new regulations set by the National Bank to limit amount of mortgage.
According to the new regulations, at the time of purchase of the first two units, every loan applicant can get up to 90% of the loan. However, if the applicant has not repaid both mortgages, and then applys for a third loan to buy another property, the amount of loan given will only be up to 70%.
2. The person with better credit record should apply
A person’s credit record affects the possibility of a loan to be approved. Therefore, it is wiser for the person with better track record to apply for mortgages. However, since only one person is applying, the total amount of income might be lower compared to a joint application, which may result in failure to obtain a higher amount of mortgage.
3. Real Property Gains Tax (RPGT) exemption
Since 2013, when a person sell off a property and gains profit, the person has to pay RPGT for the profit earned. The industry profit tax (RPGT) for the first 3 years after acquisition has been increased to 30%, whereas on the fourth and fifth year, 20% and 15% respectively. After six years, that person will no longer be taxed. Each person is entitled to a once in a lifetime exemption. If you and your spouse have a joint house ownership, then you will only get one chance. If you don’t have a joint house ownership, then both of you each can get a chance for exemption.
4. Alternative investment: Real Estate Investment Trust (REIT)
If you cannot afford to invest in a house, you can still consider investing a small amount of money in the Real Estate Investment Trust (REITs).
(中文版请看这里:http://www.durianproperty.com.my/blog/article/731)
Many people thought that a joint loan application has a higher approval rate, but if one person's income is sufficient, having 2 names in the loan application will limit the amount of loan approved. This is due to new regulations set by the National Bank to limit amount of mortgage.
According to the new regulations, at the time of purchase of the first two units, every loan applicant can get up to 90% of the loan. However, if the applicant has not repaid both mortgages, and then applys for a third loan to buy another property, the amount of loan given will only be up to 70%.
2. The person with better credit record should apply
A person’s credit record affects the possibility of a loan to be approved. Therefore, it is wiser for the person with better track record to apply for mortgages. However, since only one person is applying, the total amount of income might be lower compared to a joint application, which may result in failure to obtain a higher amount of mortgage.
3. Real Property Gains Tax (RPGT) exemption
Since 2013, when a person sell off a property and gains profit, the person has to pay RPGT for the profit earned. The industry profit tax (RPGT) for the first 3 years after acquisition has been increased to 30%, whereas on the fourth and fifth year, 20% and 15% respectively. After six years, that person will no longer be taxed. Each person is entitled to a once in a lifetime exemption. If you and your spouse have a joint house ownership, then you will only get one chance. If you don’t have a joint house ownership, then both of you each can get a chance for exemption.
4. Alternative investment: Real Estate Investment Trust (REIT)
If you cannot afford to invest in a house, you can still consider investing a small amount of money in the Real Estate Investment Trust (REITs).
(中文版请看这里:http://www.durianproperty.com.my/blog/article/731)
Source: DurianProperty.com
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