G'day all,
I'm new to this and would love some advice! My mother, who has failing health is looking to build a house on a seperate block of land she currently owns in addition to her primary abode. After building she would sell her current house and land and move permenently into the new house.Unfortunatly however she would struggle to foot the entire bill for building the new house.
My question is: Is it possible for her to gift to me, or sell to me, at a nominal price the empty parcel of land, and then for me to use my first home owners grant to help build the house?
Qualifying for the FHOG should not be a problem, as I would actually live in the house for a year or so untill she moved in, I'm just not sure as to the legalities surounding the gifting of property to a relative/child, or the selling of property at a nominal/reduced price.
Any help/advice woudl be very much appreciated!
Thanks,
-MikeHi Mike
Couple of issues i can see here.
Not sure which State you are in but most of the Grant applications have a question which goes something along the lines of
"Are you purchasing the property at a reduced price or below market value from a relative "Secondly if the Title remains in her name then you are unable to borrow against it.
Subject to her income and equity why would you not just look to finance the construction in her name with the interest rolled up into the loan which could then be repaid ince the property is sold.
Alternatively you would purchase the property in your name at market price and make application for the FHOG.
Richard Taylor | Australia's leading private lender
I think it would still be possible for you to get the grant, with the OSR assessing the deal based on market value – eg for the reduction in stamp duty.
But if your mum is getting the pension she will need specialist advice on how the gifting will affect this.
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
Sorry i was not suggesting that you would not get the FHOG merely pointing out the potential issues.
From the FHOG Addendum:
Is the purchase price for the home less than the market value of the home? Yes / No
If you have answered Yes
to any of the questions or if there is an arrangement which has the sole or main purpose to obtain the grant rather than acquire a home, you are required to submit your completed application to the Office of State Revenue together with full details and an explanation of the circumstances relating to the eligible transaction*. You may be required to produce further information to assist with determining your application.
Richard Taylor | Australia's leading private lender
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