Hi All,
I am lookng at buying a house for myself and my wife to live in, we have two properties at the moment, one investment apartment and our current home which is a 2bdr apartment.
I would like to purchase a house, I was thinking of wokring with my parents to make this happen.
I need to borrown $50,000 from my parents to make the purchase this is based on a 10% deposit, the property is worth $780,000.
Is it possible to get my parents to purchase it under their name and call it a investment property and gain the benefits of negative gearing(this would be my way of also paying my parents back the money borrowed), my fathers income is between $180,000 to $200,000 per year.
I would pay the repayments, rent (how to do this) and other costs.
If possible then transfer the propertyunder my name after 5 or so years.
Can someone comment on whether this can be done within the laws of our taxation system and also can property be trasnferred n the way that I have described it.
Your feedbackon this is much apreciated.
Thanks
Yes it would be possible.
But, if your parents are the owners then they would get all the deductions and CGT on market value when it is transferred to you. Stamp duty would also be at market rates.
You could get your dad buy it in his name as trustee for you. Later you could transfer for $50 stamp duty and no CGT, but he couldn't claim the deductions, you would.
Probably easier with the loan – try to borrow 20% and avoid the LMI completely. Get proper loan agreements in place.
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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