All Topics / Legal & Accounting / Buying my first house with my Dad- please help

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  • Profile photo of ViktoriViktori
    Member
    @viktori
    Join Date: 2008
    Post Count: 1
    August 12, 2008 - 5:15 am

    Hi everyone!
    I need some good advice on my current situation.

    My partner and I have been saving furiously (while renting) to buy our first house.

    My dad recently offered to sell 2/3rd of his house to us, as we couldn't afford the whole mortgage.
    My dad has a $290,000 mortgage and the property is valued at 420,000.

    this is a great deal for us as a wet get a small mortgage of $280,000 in a fantastic property, which we wouldn't be able to buy otherwise.

    However, I need help on the best way to arrange this.

    We have been advised that if my dad is still on the title we would not be entitled to the FHOG. Someone suggested that my partner and I should be on the title and Dad can place a caveat on the property for his interest 1/3 or $140,000.

    Is this a reasonable suggestion? and if we did this to we still have to pay the Stamp Duty on the full price of the property $420,000 or on what the mortgage value is $280,000.

    Also, I want to know that if my dad is in financial trouble can they force us to sell the house in order to claim his interest in the property.

    Obviously, I need some legal advice about this matter and I intend to do so, however I would like to at least sound like I know what I am talking about.

    Please HELP :)

    PS i live in VIC

    Viktori

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213
    August 12, 2008 - 1:34 pm

    Hi Viktori

    To get the grant all of the owners will need to be first home owners – so your dad cannot go on title. If he retains an interest in the property, but his name is not on title, then you would be acting as a trustee for his share. This can make things complex. Title will not show him, just you two and if there is no mention of the trust anywhere the Office of State Revenue would not know about it.

    Your dad would be unable to control the property from that point. He could lodge a caveat after settlement and this would mean you could not sell or increase the loan or even change lenders without his permission.

    you will also need to consider if he wishes to leave his share of the property to someone else too. how would he do this without being on title. it would be possible to do so via wills but is comlex again.

    Stamp duty would have to be paid at market rates on the value of the property being transferred. So if he comes off title, you two will need to pay 100%.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

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