I am thinking of moving to Brisbane and starting to invest in that state. I think it may be advantageous to retain my Sydney apartment (and rent it out), but I want to retain it as my primary place of residence (to avoid all the taxes if it becomes an investment). I am thinking of buying a house/apartment in Brisbane in my 15 year old daughters name (using her entitlement to first home buyers refunds etc). My wife & I would then ‘rent’ part of the accommodation from our daughter, she would live there as her principal place of residence.
Thus we would be paying her mortgage (not someone else’s), and we would be renting so we can retain Sydney as a principal place of residence (the only properties we will purchase in our name will be other investment properties).
Can anybody advise me the following:
• Will financial lenders lend to my daughter with me as guarantor (she will have no income other than the rent I pay her)?
• Will this arrangement legally allow us to retain our Sydney property as a principal place of residence?
• Will my daughter be entitled to the first home rebates?
• What is the value of these rebates in Queensland (is it $14k for new properties and/or $7k for second hand properties etc)?
• Are there any nasty legal complications that could bite us?Any thoughts will be appreciated..
Dave C
Oops.
Hi Dave, welcome to the forum~!
Do you plan to give your daughter the $7000? Is this house to be hers once you have finished paying it off, or are you just making the most of the situation to further your own wealth creation through property investing? If the former is true, I salute you for your generosity. If it is the latter, it’s comparable to taking candy from a baby then stealing some from each and every honest tax paying citizen.
Cheers, F.[cowboy2]Minors cannot enter into contracts and cannot obtain finance.
If you wish to buy a property for your daughter, maybe you hsould look at a Bare Trust. This occurs when you enter into an agreement with your daughter to buy a property with her as beneficial owner and you as the trustee owner. For all legal and taxation purposes she will be the owner, but her name will not appear on title. Any loans would have to be in the trustee’s name.
Once she turns 18, you should be able to transfer the title into her name with only nominal stamp duty.
I am not sure how this will affect the FHOG or the claiming of the PPOR, but I suspect that you could still claim you current home as your main residence and she could claim the new home as her main residence with you renting from yourself – the trustee. There may be tax consequences if she is receiving rental income as a minor though.
So best to talk to a solicitor and accountant.
Terryw
Discover Home Loans
Mortgage Broker
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Just a thought
Under the NSW FHOG, it actually mentions that it only applies for persons aged 16 and over. If you cannot enter into a contract under 18, what seems to be the purpose of the 16 and over qualification rule?
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