All Topics / General Property / buyin from my parents

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  • Profile photo of creaghbcreaghb
    Participant
    @creaghb
    Join Date: 2003
    Post Count: 1
    January 18, 2004 - 5:45 pm

    hi everyone! hope someone can assist,
    I’m buying my parents house off them for 200k.weve had 3 real estate agents in here with one saying should be able to sell for 230k.Is their any creative way to organise some finance for this? i have one other IP, which i have 60k equity in approx, is it possible to borrow against this amount instead of refinancing? (or is this cross securitising?) because ideally i want to Lease option out my initial IP (based on what i owe on it now, because if i LO it after refiancning a large amount, it will be harder to onsell and make positive cash flow). Also with my parents property, i will be renting it back to them whilst they wait for their new house to be built, i will cover rest of mortgage. also the suburb is soon to be renamed to a nicer adjoining area, which hopefully should add some value, as parts of this suburb have a bad reputation.
    Will this then be considered my PPOR, if i’m still renting it out and living in it at the same time???
    If so do i get a capital gains tax exemption if i decide to sell, and if not should i just wait 1 year to sell it to get 50% CGT exemption?? or is myy PPOR myh first property i brought??

    Sorry about all the questions!!

    Thanks,

    Creagh

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213
    January 19, 2004 - 1:39 am

    I don’t know what you mean by ‘creative finance’, but there are various things you can do. It really depends on what the house will value for. if it actually comes in at $230,000 you could still pay $230,000 with your parents gifting you $30,000. The bank would be able to lend you say 90% of $230,000 = $207,000. That way you would not need to use your other house as security (which would be cross collateralising).

    You can only claim one of your homes as a PPOR, but can claim both for a limited period of 6 months. If you are living in your home, then it should be CGT exempt when you sell. But check this with an accountant.

    Terryw
    Discover Home Loans
    North Sydney
    [email protected]

    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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