team,
my partner & I are thinking about buying a unit together with my mother, but for only me & my partnet to live in (As mum lives interstate anyway). in this equation, we will be going 1/3 each, with mum putting up the 20% deposit as a percentage of her overall 33.333% “share” in the property.
my question is: if we decide to sell down the track, and keeping in mind that my partner & i will be living in the unit and therefore none of us will be claiming the unit to be ‘an investment’, will any of us be due to pay CGT on their share – mainly my mother as she will not be living in the unit but will have her name on the property but not receiving an income from it?
any help on this would be gretaly appreciated![strum]
It is only your thoughts that create your future – Be careful what you think!
Hi Nathan,
Firstly, it depends on what your mother’s situation is, that is, if she is not claiming where she is currently living (or any other property) as her PPOR then she will be CGT exempt if she claims IT (or her portion of it) as such.
Your partner and yourself of course will be CGT exempt as it is your PPOR, and if it not so for your mother, then the most you should have to pay in CGT is the percentage of ownership that belongs to her. That is, if you each own 1/3 of the property, then at most, the only CGT payable will be on your mother’s third (if circumstances do not meet the above criteria).
Hope this helps clarify it a little for you.
Cheers, [biggrin]
Jo
I think your mum would be up for CGT unless she lives in the property initially and if she has no other property which she is claiming as her main residence.
Terryw
Discover Home Loans
Mortgage Broker
North Sydney
Click below to email meTerryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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She wil also NOT be able to deduct anything on that property as it is not available on the open market for lease at standard rents.
When I grow up, I want to be a storm trooper!
But your mum would be able to deduct interest and expenses, ie negatively gear, if you guys are paying her rent for using her 1/3 share of the place.
Terryw
Discover Home Loans
Mortgage Broker
North Sydney
Click below to email meTerryw | 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
Originally posted by nathan210:she will … not receiving an income from it?
Terry???
When I grow up, I want to be a storm trooper!
Thanks guys, very helpful.
As mum is already claimimg her current house as PPOR, then if we paid her 1/3 of the current market value in rent (1/3 of $150 = $50), then would she be able to -vely gear her 1/3 share?
It is only your thoughts that create your future – Be careful what you think!
Yes you will if she earns an income from it.
_____________________________________________
The poster formally known as The Mortgage Adviser
When I grow up, I want to be a Storm Trooper!
Yes you would have have pay her rent so she could negatively gear it.
Terryw
Discover Home Loans
Mortgage Broker
North Sydney
Click below to email meTerryw | 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
Cool, that makes life a bit easier to read.
As i currently am renting, the idea behind this is that me and my partner wish to invest again, as well as my mum, but at the same time we wish to buy a place to live in as well. with this situation, i will be paying lower per week than my current rent, my partner a little bit more than her current costs, and a relatively small cost for my mum, who has good ‘tenants’ for her part of the deal.
this is our way of creating a ‘win win’ situation, as well as breaking free of the rent cycle, whilst keeping costs to a minimum.
Thanks again for your advice, gretaly appreciated
[biggrin]
It is only your thoughts that create your future – Be careful what you think!
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