GiftlandParticipant@mel87Join Date: 2016Post Count: 2
Hi. My parents have a large block . They currently live on the block in their house. They want to subdivide the block and gift it to me so I can build a house to live in, They are pensioners and own the house outright. They bought it in 1991. My question is what costs would be involved to my parents and to me? Capital gain tax? Stamp duty? Would it effect their pension?
ThanksTerrywParticipant@terrywJoin Date: 2001Post Count: 16,190
and this could effect the pension.
Also asset protection issues.
deductibility of interest issues
The main residence CGT exemption won’t apply as it will be vacant land.
Could you let them keep it and leave it to your in their will?GiftlandParticipant@mel87Join Date: 2016Post Count: 2
How would u figure out the CGT? And would it have to be paid straight up or is it something that can be paid years later.. as I said they won’t actually be getting any money in their hands. They want to gift me the land so I can build a house to live in now for my young family.. what kind of figure would they be looking at to do this, legals etc.TerrywParticipant@terrywJoin Date: 2001Post Count: 16,190
They would have to work out the cost base – which would be roughly market value now less the value of the land when they bought it and assocaited costs – they could use expenses such as rates, interest etc to reduce the CGT.
The CGT event will be at the date of transfer and any CGT will go on their income for that year. If they did the transfer next week they would have about a year and a half before they need to pay.
Legal and tax advice – $1000
Conveyancing on transfer $2000
legals on the subdivision – $5000 approx.
Valuation – $800
If they get legal advice the lawyer would likely advise them not to do it.