Hey all,
My inlaws will be gifting us one of their North Queensland houses (in which we are currently residing in as our PPOR) very shortly.
Our questions is:
1) Will we have to pay CGT or any other fees on the transfer of this property?
Thanking you,
James
“The answer is already “No”……Unless you ask!!
No. You may even get a stamp duty exemption and the FHOG if this is your first home.
They may have to pay CGT if the transfer value is deemed to have realised a capital gain and should seek advice from an accountant.
Simon Macks
Residential and Commercial Finance Broker
***NODOC @ 7.15% to 70% LVR***
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Sorry Mortgage Hunter, perhaps I should elaborate.
We have two I.P.s excluding the property owned by the inlaws.
They wish to give us this house but are concerned by the ramifications of this gift. Yes, the house has realised significant capital growth (approximately $230,000.00) since they first built it.
They are in their late 60’s and do not wish to be penalised with heavy CGT.
Is it possible to “purchase” the house at below market value (say $5000.00) to negate the “gift” status?Is there something our accountant can do to alleviate these fees?
(And is ALL chocolate bad for you?!)
Thanking you,
James
“The answer is already “No”……Unless you ask!!
The transaction needs to be at arms length. If the property is transferred at anything other than full market value then you pay duty on the market value.
You may still get the FHOG depending on when you got your IPs.
They may avoid CGT depending on when they built the property too.
Best to see an accountant mate.
If you bought it for $5000 imagine your CGT when the time comes? [blink]
Simon Macks
Residential and Commercial Finance Broker
***NODOC @ 7.15% to 70% LVR***
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Just a throught, but why don’t you pay the CGT for them. If they are both in their late 60’s then maybe they haven’t earned enough in the last year to make the CGT huge. It may be worth checking out. You still get a valuable assett, but at a hugely reduced price.
LandtThey could possibly transfer the house in stages to reduce their CGT bill? eg 50% now, and 50% july 1.
Terryw
Discover Home Loans
Parramatta
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If they make a capital gain this may be deemed as income by centrelink and any pension payment might be affected. This ramification may not have been considered !
Something else which hasn’t been considered is the question on the FHOG form which asks is the property is through sale or transfer from a relative. Oh and Gifted properties aren’t eligible anyway – If you pay less than $7,000 for the property all you get is what you pay…
Stuart Milne
Non-Conforming Specialist
READY Mortgages
http://www.readymortgages.com.au
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Mob: 0404 056 055If your inlaws built the house and lived in it as their PPOR (or rented within allowable limits), then there should be no CGT. CGT may also depend on what year they purchased the property. Otherwise, there will be CGT to consider.
Transfer fees will probably be waived. You will still probably need to pay stamp duty. I imagine this would be based on a valuers report. The valuers report would also help to establish the cost base for the asset for your CGT purposes (if you ever decide to sell).
There may be implications for pensions etc (even if no money changes hands).
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