All Topics / Legal & Accounting / Transferring property to mum

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  • Profile photo of picklesampicklesam
    Participant
    @picklesam
    Join Date: 2004
    Post Count: 55

    Hi all! I have a PPOR which owes about $380k it is under my name. My mum suggested she'll put $250k cash into my mortgage which means i'll only owe $130k. But the catch is she wants the property to be under her name, and that i have to pay off the remaining balance. This seems like a great idea as i can pay off the remaining ASAP, even though it'll be under her name i'll inherit it when she passes on.

    1) is it possible to have the house under her name and the mortgage remain under mine?

    2) Is there some sort of transferr fee she'll have to pay to the state?

    thanks

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024

    Hi PS

    Couple of issues here.

    1) No the house cannot be in her name and the loan in your name solely. She will need to qualify for the loan as other wise it is a 3rd party mortgage and lenders dont like these arrangements.

    2) There will be stamp duty payable again on the Transfer Value if the title is transferred to her.

    3) There will be mortgage discharge / transfer and registration fees payable and also a break cost if the loan is fixed rate of interest.

    4) Any First Home Owners Grant or First Home Buyers Stamp Duty concession may need to be refunded if the terms have not been met.

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
    Email Me

    0-40 Properties in a decade with an unencumbered value of over $35M. Email for a copy of my API article

    Profile photo of picklesampicklesam
    Participant
    @picklesam
    Join Date: 2004
    Post Count: 55

    thanks for the pointers Richard…hmmm what if mum was to 'gift' me the $250k, the house remains in my name, after i've paid off the house i transfer the property in my mum's name? I understand she'll still have to pay duty but will i be taxed on the $250k?

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024

    No Tax payable when you sell your PPOR.

    Just need to watch her Pension benefits if she has gifted away 250K.

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
    Email Me

    0-40 Properties in a decade with an unencumbered value of over $35M. Email for a copy of my API article

    Profile photo of Scott No MatesScott No Mates
    Participant
    @scott-no-mates
    Join Date: 2005
    Post Count: 3,856

    There are no guarantees in life – regardless of how good her intentions at present, she may change her will on her deathbed & you may miss out. You will need to have a caveat or retain % ownership.

    Profile photo of elkamelkam
    Member
    @elkam
    Join Date: 2006
    Post Count: 722

    Don't forget that if you transfer the house into your mothers name at some stage, assuming that she is not living in it with you, then any capital gain from that point on will not be tax free.

    Is there a special reason why your mother wants the title solely in her name instead of only the percentage that she is financing ?. 

    Cheers
    Elka

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