Good Evening
Just a question about my nans unit. She is now moving into a nursing home from her 2 b/r unit which she fully owned. Unit is probably worth $290-320000. She has to pay a $180000 bond to the nursing home. Her three children (inc my mum), are trying to figure out if they can keep the unit and rent it out but are not sure of the best way about it.
– Can Nan sell it to them for around the $180k mark and each take out a loan for $60k with the rent (about $270-280 p/w) covering most of the loans.
– Can they keep it in Nans name, rent it out, and just get a $180k loan to pay the bond
– i've also been told they can keep it in nans name for up to 6 years without capital gains being calculated, then purchase it at that point.
It is confusing for us all but I am keen to help them out as they are heading to the retirement age and it could be a great boost for their mediocre super savings..Thanks in advance.
MJMJ,
In a situation like yours, it is best for the family to go to a Financial Planner. Preferably, someone who works for the bank, who is on a salary, not commission.
I’m not implying that Financial Planners on commission are only after the your money. All I’m saying here is that those who work for the bank have not other motivation than you point you in the right direction.
Rulings on taxes can be tricky, you will need a pro who is up-to-date with all the changes in this very complicated area.
Good luck and take care.
Angel
Hate to say i disagree with Angel about approaching a Financial Planner employed by a Bank as they are limited in what they can offer and are always biased towards the products they promote.
Look for an independant Financial Planner who works on a Fee for Service basis rather than a commission only basis.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Key question – what does Nana want?
Seems the post is all about the 'kids' – does nana have a stated opinion?
Hi MJ, I would suggest you take your Mum to Centrelink and get things in writing regarding your Nan going into and aged care facility. The laws have changed somewhat and are complex. The house is unlikely to be sold under market value. ACF's have seen it all and the laws are fairly specific. Your dealing with a private company (mostly) and they want their cash. People attempted to bypass the sale by having a relative move in with them. That's still ok however the relative has to have lived with them for 5 years.
Thanks for the comments.
Nan is happy with the situation and would like to see her unit stay with the family.
As for selling it below market value, the ACF have already done their assessment of assets which included the unit so what we do now should not affect that, the bond has already been agreed to.You have to get advice as there are various rules concerning the selling of assets. She may end up losing some of the pension if it is sold for example. But keeping it and renting it out may also result in the income making her go over the limit and result in a reduction of pension (I am really only guessing here). There are also CGT considerations, especially if she has held the unit from before 1985 as it may be tax exempt.
Your nan should also set up a power of attorney to cover medical decisions and financial decisions and she should have her will done or updated.
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
Thanks again.
Dear all,
I hate the thought of ageing. Oh my goodness, I’m like, (as the kids would say), 12 years away… to being considered senior citizen. I promised myself that by the time of my retirement, I’d have divested myself of everything. I’d live in a small plot of land, swinging away in a rocking chair.
It’s all too hard.
Take care.
Angel
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