My wife and I want to get a loan to buy an apartment. It would be too long to explain our whole situation, but basically we are faced with the following choice:
-Loan only for my wife with 0.345%; property will be owned only by my wife.
-Loan for both of us, around 2%; property will be owned by both of us.
We will be paying half the monthly rent equally as we are both working with similar incomes. So from a logical point of view, we should both owned half of it. But the interest rate difference makes it tempting to the take the single-person loan.
Looking it up online in Japanese, it seems like single-person loan is fairly common and almost recommended, although I suspect it is mostly considering the traditional family model where the husband makes most of the money, so having the wife jump in for the loan would not add much value (impression reinforced by the fact that many articles call this loan “husband-only” and not “single-person”, like it’s unthinkable it could be the wife only….)
One of the most common argument is that in case of divorce it’s easier to settle down things, but to me it sounds more like “you’ll be able to easily kick your wife out and have for yourself that nice house where she raised your kids” buuuuuuuut that’s just my humble opinion. I feel like having to discuss who gets the property is a good and necessary thing (albeit probably tiring, frustrating and infuriating, but still necessary).
Anyway, to me it sounds like a one-person loan would bring lots of problems:
-If the person unrelated to the loan dies, the other one has to make do to pay the loan alone.
-I’m guessing since I’m not the owner I won’t be able to sign anything related to the apartment, for example to allow a repair guy to fix something.
-If my wife wants to give me my rightful share when we are done repaying the loan, I might have to pay gift tax (贈与税) to get back what I paid myself (!)
-If we want to sell this apartment in 10 years and buy another one with the money, I will either have to pay gift tax OR we will need to put the new apartment solely under her name again, continuing the problem.
-If we stay in this apartment until we are 90 and she dies first, I might have to pay a succession tax on the full price of an apartment I paid half by myself.
And so on.
So I want to go with the equal share loan, but it’s going to cost us ¥1~2m in the next few years, so I wonder if it’s worth it.
I already tried contacting accountants and tax experts, but usually the explanation gets too complicated and they explain so many different scenarios that by the end of the consultation I am usually more confused than I was before starting it.
Has anyone been faced with a similar choice? What option did you choose? And what were the pros and cons of each option you considered?
Really curious too see if I missed something and/or if I’m overthinking the tax problem.
by Sowon27