I don’t know what you will say after reading this but for sure I am in an awkward situation. We have got 3 IPs. Our elder son and his wife decided to move from family home last August, We asked them to live in one of the IP and manage it as their property but they declined and started renting. back ground of the situation
here https://www.propertyinvesting.com/forums/property-investing/general-property/4329920
Last week we came to know that our daughter in law is pregnant. Now they want to live with us but asking us to move in a 4X2 IP. Our PPOR is only 3X1 and their bed room is very small. My wife wants to do what ever they say. My son/his wife are suggesting us to move with them in one of our 4X2 IPs, they will pay the rent and we rent out our PPOR and what ever rent received, we give it to them. ( Situation could be like this. PPOR rent $350 per week. Current rent for 4X2 PI is $390 per week (lease expires in April). They pay the different $40 per week.) We live in their home because they rent it.I do not know tax implications, I explained my wife that they may change their mind after 6-12 months. She says, no worries, we can go back to our home then. It is an emotional issue now and I am in minority. Can you please explain me pros and cons. I doubt there are any benefits except making my wife happy, more rooms for them, $260 saving for them and for me? A gift…..Grand child. I am happy to do this but if there are Tax related issues…………..I could be in deep ****. Please help………………..Thanks.
Hi,
You tried so hard to give them a start before and now this! I am sorry to say this to you as a dad but they haven't really come to the party unless it works for them in the extreme.
Were they going to live with you rent and board free in the existing house (3×1)? This whole thing sounds really really messy to me.
A couple of things are..
are the current tenants of 4×2 willing to move on quickly, if not you will have 120 days to wait out as this is not your PPOR to move into?
Can you easily find a tenant for a 6 month lease on your PPOR , just in case of problems?
You pay $350 to them and they pay $40? Can I come live with you? I'll bring my baby?
I think this is a tough situation for you to be in. All 3 of them will force this on you unless you can say no.
Get an accountant. The last thing you want is face financial hardship or ruin because you love your son (and extended family). Do what feels right for you. Your wife will always want your son to be happy as do you but it shouldn't happen at the sake of your happiness.
What happens if after 6 mths you are all at each others throats? What happens if they are messy? What happens when the baby cries all night an no one gets any sleep? Who will pay the bills? Who will buy food? Do your wife and daughter in law get on really well or just ok? I don't think I could ever live with my mother in law as we are just too different.
Keep thinking, there may be other opinions which are helpful, just don't rush in (you have 9 mths
) Congrats by the way!!!!D
DWolfe | www.homestagers.com.au
http://www.homestagers.com.au
Email MeWhat about putting a transportable cabin in your back yard thus giving them a little bit of privacy and still having Grandparents close by.
When you rent out the PPOR you can still have it deemed for 7 years as your PPOR as long as you do not claim another property as your PPOR for capital gains tax exemption.
If you rent out your PPOR you have Council Rates, Interest on Loan if there is a loan , Insurance and Water Rates expenses to pay.
Why did they move in with you was it because they could not afford rent or to be closer to grand parent?
If you make a profit on renting the PPOR it will be taxed as income added to your other assessable income. If joint owned, half is added to each owners incomes.That is a great option! The DHS (Victoria) provide transportable homes (Granny flats). I think you can go on a waiting list to have one put in the backyard. When it is not required any more they will remove it. Better option than having to move all your stuff in and out of houses.
D
DWolfe | www.homestagers.com.au
http://www.homestagers.com.au
Email MeHi,DWolfe,
Some more info…………….
We live in 3X1 and bed rooms are not big enough so they moved.
4X2 IP's lease expires in April 2010.
Our daughter in law is always good to everybody. Always respects us and she never wanted to move from our house but she had to go because of her husband's pressure. My wife and daughter in law get on really well. She is 8 weeks pregnant and my wife visits her after work, take her shopping and cook food of her choice and trying make her smiling all the time. She also talks to her parents every week. I don't see any problem between them.duckster wrote:What about putting a transportable cabin in your back yard thus giving them a little bit of privacy and still having Grandparents close by.
When you rent out the PPOR you can still have it deemed for 7 years as your PPOR as long as you do not claim another property as your PPOR for capital gains tax exemption.
If you rent out your PPOR you have Council Rates, Interest on Loan if there is a loan , Insurance and Water Rates expenses to pay.
Why did they move in with you was it because they could not afford rent or to be closer to grand parent?
If you make a profit on renting the PPOR it will be taxed as income added to your other assessable income. If joint owned, half is added to each owners incomes.Thanks for a good option, I did not think of that because there is no room to put transportable cabin. Or Granny flat.
They haven't moved back with us, but they suggested us to move with them in our IP. If we move in our IP with them, there will not be any change in rent. It will be the same $390 per week and they will be our tenants. The benefit to them is they will receive the rent of our PPOR, it will be our loss because it will be our income and we will be paying tax on it. I can explain it to them, Thanks DUCKSTER, I did not think the income of rent from PPOR when we rent it out.One tax implication is CGT – but you are allowed to move out of your main residence and rent it for up to 6 years and keep it CGT free.
If you do move in together I would only pay them half of their rent though.
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
How long do you want to live there?
How long do you think they will want you to live there?
How long do you think they want to live with you?
What is your exit strategy ?
How can you teach them to fish rather than giving them fish ?
Do they want to be self sufficient, and can you help them achieve it ?And BTW – congratulations and whatever happens, wishing you and your family much happiness.
Cheers
thecrestthecrest | Tony Neale - Statewide Motel Brokers
http://www.statewidemotelbrokers.com.au
Email Me | Phone Meselling motels in NSW
Thanks you for support and suggestions and help. We have decided not to move with them. They can move with us in our 3bdr home if they want to. We can offer them our master bed room and we can move in a smaller bed room. We want to support them as much as we can. We are ready to welcome our grand child.
I will keep posting updates. Thanks.
) Congrats by the way!!!!
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