A penny for your thoughts…..
I would like to help my brother get onto the property ladder – he is eligible for the first homebuyers grant, as am I.
My question is: Can I help him financially but keep my name off the title to preserve my own eligibility for the grant for when I buy with my wife (assuming it still exists then).
I assume there is no way to structure a discretionary trust with him as trustee to still qualify for him but preserve me.
My financial assistance could be in the form of a lump sum, ongoing payment, or combination.
I personally am not looking to buy for social reasons for a number of years.
The assumption can also be made that my brother is trustworthy and I require no legal protection for my investment.Any advice is very much appreciated
Yes, you can help him by gifting or loaning to him. A trust would not work as trust purchasers cannot qualify for the grant. So a loan is probably the best option.
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
Terry is bang on but you need to be a wee bit careful as most lenders now want to sight where the deposit funds are coming from so might have to just box a little clever.
Richard Taylor | Australia's leading private lender
Thanks for the advice.
I thought there were limits on 'gifting' money for tax purposes ($10,000 springs to mind for some reason). Can I loan an unlimited amount to my brother and do I have to charge interest (even at a token rate) to prove to the taxman it is a loan?
What ever the terms of a 'loan' if i can make it happen it would solve my problem.
Thanks again to those of knowledge that continually assist the bewildered and bemusedAs far as I know there are no limits on gifting unless you are a pensioner. Interest is up to you. It could be interest free. But you should document it properly to protect yourself. Make sure you have a written agreement.
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
There is no limit on gifting however if your brother wants to claim the interest as a Tax deduction then you need to charge him some.
Normally we structure the private mortgage for our clients at the same rate as they are being charged by their Bank.
If it is a property that he will be living in then no you can pay all of his repayments for the next 25 years if you want but i would question why you would do it even if he is your brother.
Richard Taylor | Australia's leading private lender
Thanks again Richard and Terry.
You have solved all my (current) problems.
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