All Topics / Help Needed! / Sell/buy or keep/buy

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  • Profile photo of HueyHuey
    Participant
    @huey
    Join Date: 2003
    Post Count: 213

    Hi all,

    I need your advice here:

    I have a nice house in the Olympic village, Sydney. Last year when I approached an agent re: lease or sale my property. He advised to lease it. Now my son wants to buy a house in Canberra and everyone says that the housing market in Canberra is on the way down.

    1. Should I sell the house in Sydney or use its equity to buy a house in Canberra?
    2. If I should sell then should I consider to advertise for “House exchange” or simply sell then buy separately?
    3. It’s simple just to buy a house in his name but should I consifer another structure eg. Trust, to minimise his loss & to protect myself (I need to lend him money for the deposit)?

    Many thanks in advance.

    Regards

    Huey

    Profile photo of LizzyLizzy
    Member
    @lizzy
    Join Date: 2004
    Post Count: 230

    Hi Huey,

    My two cents on the Canberra property market is that it has peaked like Sydney… I’d say it will slow as some areas of Sydney will.

    I lived there during the boom and those that rode it came out well, it all seemed to happen around the same time as Sydney.

    Good luck with it all…

    Liz Wilson

    Mortgage Lender

    Profile photo of melbearmelbear
    Member
    @melbear
    Join Date: 2003
    Post Count: 2,429

    Huey, Huey, Huey

    Remember our discussion about your son, and his occupation? Mate, you really are better off not buying it in his name. Maybe in his wife’s name, or a trust, but definitely not in his name!!

    As for your Sydney house – has it increased in value since you bought it? what are the likely prospects for it? If it’s a good area (I dont know sydney so can’t comment), maybe keep it and borrow against it for your son’s house….

    Cheers
    Mel

    Profile photo of HueyHuey
    Participant
    @huey
    Join Date: 2003
    Post Count: 213

    I know, I know, I know, Mel!!! but I can’t explain well enough to convince my hubby, my son & his wife that we should buy it in Trust. I don’t know what structure (who are the trustees, appointer ….) that we should set up to protect everyone’s interest. It’s not simple questions like I asked above.

    Newington is the Olympic-2000 village in the Iner West next to the BiCentenial park with all the Olympic sport facilities. I was told there will be some apartment building project but no more land for houses in Newington or the surrounding areas. CG is around 50% in the last 3 yrs. I have around 200K equity in that house.

    Buying a house in his wife’s name will have negative effects if they move to Sydney and have to rent the house. She works part time therefore in a low income package. They can’t claim much tax thru negative gearing and on top they of that have to pay for rents in Sydney.

    Hi Henry, in Canberra there is no land tax threadhold for IPs. I know very well that I should teach my son to fish and I used to give my father a hard time for sacrifying his own wellfare to help my brothers too much that they never had a chance to grow up. Unfortunately I tend to do the same although I try very hard not to[confused2]. I carry his blood …

    Another good reason for that is it forces him & his wife to pay for the mortgage instead of spending too much. It easily becomes a bad habit.

    I sometimes see ads under the “House exchange” category like “Beautiful 4 brs, ens, DLUG in Sunshine Coast for an equiv house in Canberra. Ph 99999999”. It will be less hassled if it can be done because because there will be no other buyers involved.

    Regards

    Huey

    Profile photo of DDDD
    Member
    @dd
    Join Date: 2004
    Post Count: 508

    no land tax threshhold at all in Tassie too so be careful about each area you invest in.

    Use equity, buy the bloody thing in your own name. Rent it to your son on the proviso that if he saves deposit, when he gets there you will sell him the Canberra house for what you bought it for plus only 50% of the cap gains between now and then. This will do two things.

    Train him into getting his own finger out, and give him an achievable goal with good benifits.
    Hey if there is no cap gains you have no loss and he gets the time to save for the house.

    Worying about the neg gearing tax break means you are thinking small stuff not big picture. If you rely on any govt, they will only change the rules again.

    Good luck

    DD

    Don’t sweat the small stuff,and it’s all small stuff!!

    Profile photo of melbearmelbear
    Member
    @melbear
    Join Date: 2003
    Post Count: 2,429

    Hey Huey

    If they really won’t be convinced, and want to buy it in your son’s name, maybe you should offer your house as security for his loan – so he borrows the full 100%. This way, he’s got the full loan – you haven’t actually lent him any money, but your security is still tied up if he does anything wrong – which he won’t cos he should be able to afford the repayments!!

    If there is still growth for your Sydney place, don’t sell it and give him the money, keep it, and let him pay for his own house[biggrin]

    Cheers
    Mel

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