my daughter and i want to buy a property together, because she cant afford to on her own.what structure do we set up so that we can do it together and later one of us can exit.
Hi Will
The answer to this qeustion depends largely on what the ise of the property will be for.
If it is a home for her personal use and will be a Principal place of residence then you would structure it differently that you would if it was an investment property.
For an IP you may use a Unit Trust which gives you flexibilty however you may run into stamp duty and CGT issues.
I would need more information before i could give you a valued answer.
Cheers
Richard Taylor
Residential & Commercial Finance Broker.
Licensed Financial Planner. Ph: 07 3720 1888
[email protected]
Looking for life cover – We Guarantee to beat any quote you have in writing.Richard Taylor | Australia's leading private lender
Hi Richard, thanks for your reply. The house would be her primary residence.She may sell in afew years but at present cant cover the morgage.
You could possibly set up a bare trust. You buy the house in your name with her as the beneficiary. You are in effect buying it in your name with her owning it. That will allow transfer of title without stamp duty issues, but it must be properly documented at setup.
If you jointly go on title you will be up for stamp duty on your exit. However, this could be minimised by you taking a small precentage of ownership.
Terryw
Discover Home Loans
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Hi Will
Armed with the additional information that it will be a PPOR then if you buy it in Trust and she occupies the property then she will loose the First Home Owners Stamp duty concession.
Why not lend her 20% deposit and let her do it as a lodoc / nodoc loan and keep the property in her name only or alternatively get her to look at the shared equity scheme whereby she will only be required to make repayment on 80% of the purchase price.
20% of the purchase price will have no interest charged or repayments required until such time as she sells the property and then all she will need to do is repay a portion of the profit.
OMHO
Cheers
Richard Taylor
Residential & Commercial Finance Broker.
Licensed Financial Planner. Ph: 07 3720 1888
[email protected]
Looking for life cover – We Guarantee to beat any quote you have in writing.Richard Taylor | Australia's leading private lender
The other option is just set up a loan with a split eg you may do 30% 70% both a liable for the entire loan; however each could look after their own split.
(this may blow the eligability for the FHOG and stampduty savings if you are not going to live there for a period or have owned your own O/O property in present or past; but guess you have to weigh this up)
When it sells your agreement of how much goes to who is based on trust. This way you could contribute to the deposit and the repayments and have a reward at the end if there is capital growth.
You would both have to have a satisfaction of trust with each other to meet the repayments as you would both would be responsible for the whole of the loan if things go wrong. Which can do when arrangements are made with family or friends, it would be suggested you seek legal advice for this scenario.
Wayne
Mortgage Adviser
Email [email protected]
http://www.alphamortgagesolutions.com.au
First home buyers, investors, refinace, loan consolidation, equity loans, free service we come to you!I was wondering in this situation, depending on your current financial situation and if you’re both locally available:
Using Wanelad’s option of splitting the loan, if both Father and Daughter moved into the house until it could be deemed PPoR for both, then the Father moves out and “rents” his portion to his Daughter, could the Father treat it as an IP (thus making his portion of the loan Tax deductible) whilst also keeping free of paying CGT upon sale of the property, through the use of the 6 year rule?
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