Note: This property is subject to a life estate (tenant) with no future return.

Life estate

The right to use or occupy real property for one's life. Often this is given to a person (such as a family member ) by deed or as a gift under a will with the idea that a younger person would then take the property upon the death of the one who receives the life estate.

I would assume in your case the younger person is selling the property in excample above on condition the family member lives thier rent free hence no future returns.

point of note: how long is the life tenant going to live? How long are you going to forego rent/outgoings/insurance/land tax etc? What costs is the occupant going to pay, if any?

You may need to enter into a lease with the occupant but for no fixed term, rights regards inspections, water usage etc – seek legal advice. Also what are your obligations in regards to maintenance?

Now you need to apply the appropriate discount to the market value to determine how much you are going to pay. You may need to engage a valuer & an actuary for guidance. Eg mv of $350K, rent foregone 20 yrs @ $15k so you’d only offer $50k.

This doesn’t fit the bill for normal ip so you are putting on the early demise of the occupier.

terry, do you mean liability for purchaser or vendor? Cgt for purchaser would be even greater if purchased at a large discount.

Its still available by the looks of it – but for $320k now:

http://www.domain.com.au/Property/For-Sale/House/VIC/Reservoir/?adid=2008514985