Ok so my parents said that they want to give me their house. There is nothing owing, completely paid off.
They have no clue what would be involved in such a process and neither do I. So who do I seek advice from and is this the right thing for them to do.
* they are on the pension (Centrelink)
* Im the only child
* which is the best way to do it – gifting me or transfering my name onto the house?
* I dont have an existing house or home loan. My wife however does have a home loan which I am contributing too
* who are the best people to talk to regarding this
* what costs do I and my parents need to be aware of?If the above is not possible then how can my parents who are on the pension use the equity in property investing. They have no existing debts at all.
What if they add me as a Joint owner?????
Im all for this but dont want this to affect my parents pension.
I would also seek advice on what can be done with the equity in terms of property investing if I was to be given the house.
If they transfer the property to you, then they will be liable for CGT and Stamp Duty. Even if no money changes hands (i.e. they gift the property to you), then you will still need to pay Stamnp Duty and CGT on the market value of the property. If they have always had the house as their PPOR then it will likely be CGT exempt. You should also factor in the cost of conveyancing to transfer titles ($1000 to $1200)
If they are on a pension, then they will probably not have a large enough income to service additional loans for property investing.
If you were to be gifted the house, then you could access equity in the house by establighing a Line of Credit against the property in order to fund deposits and purchasing costs of additional property. You will of course need to have a large enough inome in order to service the additional debt.
Cheers,
LukeGifting the house to you will affect their pension, they can only transfer a very small amount annually to you before it affects their pension. There is no cgt if it is their house (where they have been living). You will pay stamp duty on the market value of the house & any conveyancer fees.
It may be best to transfer a very small amount to your name eg 1% as joint tenants (joint tenants get the property when the other party passes away – other conditions may also apply). You might also consider granting your parents a 'life estate' so that they can live in the house until they pass away.
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