Hi,
With capital gains tax effectively acting like death tax on willed property I am hoping to buy my parents house. Basically they want to leave the house to me but I don't expect or want them to leave me anything and am happier to fund their retirement by buying their house now while they're young enough to use the money to enjoy themselves.My question to the experts is: can they sell me the property via an interest free loan – i.e. effectively take the banks place in the mortgage. I make monthly repayments without any interest charges. They have an income, we avoid the capital gains that would be incurred if they pass. What happens if they pass with debt outstanding?
So 3 Questions:
1 Can a family member sell a home, effectively owning the mortgage and not charge interest
2 What happens if they pass away before payments have been completed?
3 is there another recommendation given my wish to remunerate my parents according to the value of their home.Hmm
There is not CGT on the family home. Even if you inherit it you will not have to pay CGT unless you rent it out and later sell it. Stamp duty exemptions would apply to the transfer post death too.
If you buy the house now you will pay stamp duty.
Anyway,
1. Yes
2. You would still have a debt to the estate. But the parent could forgive the loan in their will
3. wait?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
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