tax implications

Hi ChinaBear,

You definatley need some help with this one. Lets see here we go.
1. You are never too old to take out a loan, finaciers can not discriminate against age, servicability and the deposit are and should be the only issues in securing finance.
2. If they gift you the money then you are buying the property not them then you (you meaning you and or your wife) will be on the mortgage not them.

OK Heres a possible solution to your dilema.

Treat the potential property as a joint venture, where you are the debt patner and your inlaws are the equity partner.

Have a joint venture partner agreement drawn up to that effect to protect all parties. Or set up a family trust structure. You need to talk to an accountant.

Ok you purchase property for $200K all up including closing costs
You finance property on 50% LVR ie borrow $100K which would make you each 50% owners in the property. ie you have contibuted $100K (all be it borrowed)as have your inlaws total invest $200K Upto here its easy.
Now forget that they are your inlaws, if you were to rent the property on the open market asuming a conservative rental return of $200 per week you would each share in this rent revenue ie $100 each, and you would both share in all expenses and outgoings of the property. From your $100 it would be your responsibilty to service the debt.
Now it becomes complicated because the inlaws will move in. Using the above example and treating the property in its own right technically the inlaws should pay you $200 rent with a $100 rebate because they are 50% owners which means that they still should be charged 50% of the rent. And the same would apply visa versa if you moved in you should be charged 50% of the rent. This way it is treated as an investment property and you can claim your expenses in cluding interest.

The up shot is that you both share in the equity growth of the property. Lets say in 5 years the property has grown by 50% (which should be a conservative estimate) to a value of $300K and then it was sold, you would each recieve basically $50K profit from the sale. Your inlaws have paid in the same period $25,000 in rent ie $5,000 pa but they have still made a $25K profit so they have technically lived for free because unless you are to structure a deal that they can achieve this they will make nothing other than approx 5% Interest on their existing $100K, and still be paying rent where they are.

This is a simplistic explanation to get the idea across of a way to do the deal.

I hope this helps
regards
JohnD