Hey guys.
My parents are handing me the keys to the house at the end of this year. They will continue living in it until their time comes. Which I have absolute no issue with (of course).
Now the house is valued at $400k – given a value by two real estate agents 6 months ago.
Now since I wont be paying anything for the house. What should I be aware of??
Will I have $400k in equity?? – possible the house is worth a little less in the market today.
Since I would like to get into property investing – how can I use this to my advantage?
Many thanks and look forward to reading your replies
Daniel
Hello Daniel
Have you and your parents discussed this with an accountant versed in estate planning to make sure this is a good idea?
To my thinking, if your parents gift you the house while alive you will have to pay at least stamp duty on the transfer which won't happen if you inherit. It depends on the state you are in but this could be +/- $20K
Also, unless you are planning to use it as your PPOR as well, the property will start to attract CGT from the date you become the owner. If it remains your parents property it will continue to be CGT free until you inherit.While the impluse from your parents is really nice, financially it may be better to do it differently unless there is another overriding reason to do the transfer now.
Best to get some advice first.Cheers
ElkaIf your parents are or will be relying on a government pension get some advice as this will affect their pension rights
Thanks for the reply. HAvent spoken to an account, plan on doing this some time soon. But seeing as I wont be using it as my PPOR then from reading what Elkam wrote has me somewhat concerned about doing this whole thing.
What other ways are best to go about it?
Your parents can just leave you the property in their will; first to each other and then to you.
You need to get some professional advice on this if you or your parents have a reason why this is not suitable.If it's because you want to be able to get some equity out of the house for investing, this may be possible even if they are the owners but you will need to check this. Maybe a good MB can give you some options.
Don't forget, irrespective of whose name the house is in you will need to be careful using this property as collateral because if your investments go bottom up your parents could lose their home.
Cheers
Elka
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