My Mum purchased an investment property (borrowing 100% of the purchase price) approx 18 months ago but is now struggling to make the repayments.
I am looking to move out of home and am considering buying a 50% share of the investment property, however I would be keen to move into the property.
From advice we are given so far there will be a number of expenses incurred in setting up such an arrangement:
*Setting up a new loan
*Co-ownership agreement (Conveyancer/Lawyer?)
*Stamp duty
*CGT (Any ideas how much?)It also appear quite complicated if I were to live in the property. Could my Mum still claim deductions as an investment property if I were to pay rent on her 50% of the property? What are the impacts if I pay non-commercial rental rates? What impact will this have on her negative gearing?
Is anyone able to provide some clear advice on the best way to make this work? Just wondering if there is any better way to go about this, or if there are any other costs associated that I am not aware?
Thanks for your help.
buying part of the house will affect your eligibility to fhbg, if you qualify.
Your mother would only be able to claim her % of outgoings, rent etc.
Mum would pay CGT on the profit on her half of the house. You can pay under market rents but this will limit her ability to claim deductions.
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
Hi Sharon,
Where is the property located? has she had any growth in the property and what is her strategy for the investment? ie does she want sell or hold?
There are a number of other options depending on what your mum wants to get out of the property.Dazz
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