My parents want to give me part of their land to build a home. Other houses in the street have built and subdivided, so it should be no problem. Is this a good way to build capital to use for property investing? Will they have to pay any taxes on this gift?
This is a complex area of tax. If they are subdividing their main residence, then there may be CGT when they sell it to you. Or gift it; stamp duty and CGT is calculated at market rates. I am not sure if there is a way around it, but there may be if the purchased the land prior to the introduction of CGT.
It may also be better if they just keep the land in their names and you do some sort of joint venture.
So you should consult a tax specialist.
Terryw
Discover Home Loans
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Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
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