Hi everyone
I am in a very fortunate position where my uncle owns a 2brm apartment and is wanting to sell. He isn't in the need of a big lump sum payment and so I have put to him the proposal of him acting as my financier. We have agreed to a purchase price of $150 000. Instead of me borrowing the money at 8%, I have suggested to him that I simply pay off the mortgage to him at a reduced interest rate. This way he wins buy getting more than the purchase price in return thru interest, and I save by not paying the bank interest rate. However…..my uncle is very hesitant and and wants to know all the legalities of the deal, as do I. Can anyone please help in regards to where to find out more information about how to actually process the deal. ie, does he have to pay tax on the money i pay him as it would be a weekly income?? can he actually gift the property to me and I simply pay him a weekly payment to avoid taxes? Any information on directions to head with this would be very much appreciated.
Cheers
You will need to speak to a solicitor. And work out how you are going to do it.
One way is The title passes to you and you pay him in installments. This would be only possible if he could pay out his loan on the property if he has one.
Another variation is the wrap with the title staying with the uncle until you make the final repayment.
Another, is he lends you the 20% deposit and you borrow 80% with a bank.
There will be different tax implications depending on which method you use and if the property is subject to CGT etc.Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
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