Buying a back up house.

[Empty Pockets]

Has anyone considered buying a back up house?

Our house is worth about a mil. If my partner or I were to pass away there would be no way either of us could maintain it. It would be far wiser to sell and scale down to something half the size & cost.

If one is confident on house price growth, would it not make sense to purchase a back up house that you could move into if the $hit hits the fan? Are their any tax or CGT implications that would apply?

 

[neK]

Have you thought about taking up Life insurance instead? Much cheaper than buying a 2nd house.

To cover you should you become disabled and not die, you can take up Income Protection which will cover 75% of your income.

 

[Empty Pockets]

Have you thought about taking up Life insurance instead?

Not everyone can get life insurance.

 

[luckyone]

Has anyone considered buying a back up house?

Our house is worth about a mil. If my partner or I were to pass away there would be no way either of us could maintain it. It would be far wiser to sell and scale down to something half the size & cost.

If one is confident on house price growth, would it not make sense to purchase a back up house that you could move into if the $hit hits the fan? Are their any tax or CGT implications that would apply?

Isn't that one of the things an investment property is? In which case, yes I have done that.

 

[neK]

Not everyone can get life insurance.

Anyone can get life insurance... if they really want to.

You should look into your employer superannuation to see if they will provide you with automatic insurance without any need to complete a personal health statement.

Most employers will allow you up to $250k under an "Automatic Acceptance Limit".

You also have Accidental death insurance which would cover you in event of accidental death, so things like heart attacks aren't included. Normally I dont think too highly of accidental death insurance, but some is better than none.

 

[Empty Pockets]

Most employers will allow you up to $250k under an "Automatic Acceptance Limit".

Yes I have about $400K of life cover via super. Anything over requires medicals which due to a pre-exisiting condition I cannot get cover for.

 

[BV]

You should look into your employer superannuation to see if they will provide you with automatic insurance without any need to complete a personal health statement.

I thought life cover does not include risk from preexisting conditions so you could be thinking that you're covered till the day you make a claim

 

[BV]

Has anyone considered buying a back up house?

I do consider this day and night but my problem are the banks.
They don't want to lend me any more of their money....

 

[BV]

Empty pockets

(Judging from your nic name you must be loaded with cash and pretend to have empty pockets?)

On a serious note, many people have holiday places
and keep them vacant. Others have a 2nd place which is rented so it doens't cost them much to hold and over time it could go up in value so they get something out of it.

In my opinion investing is the way to go but since you're worried about your partner I'm guessing that you're near retirement age? If you are, you need to get some financial advise so that your assets and invesments are structured in the most tax efficient way.

With investment properties there are tax advantages while you're paying tax because you can claim the shortfall between rent and expenses and get a tax refund. Ofcourse as with every investment there will be capital gains tax when you eventually sell the property.

CGT doesn't bother many of us here because we aren't planning of selling...
I hope this helps.

 

[marg4000]

Why decide now?

The important thing is that the surviving partner will have a valuable, CGT free property which will provide options for when a decision is made about downsizing or relocating.
Marg

 

[Paul Do]

Should everyone buy a backup house?

 

[Aaron Sice]

Should everyone buy a backup house?

mmm...well, then there'd be no housing shortage, would there?

after all, there'd be twice the number of rooms available to rent, not that they ARE, but they COULD be, so there'd be no shortage....right? right? yes I am right. I'm a bear.

 

[Jacque]

Worst case scenario is that you could rent or move in with rellies
Renting will be far cheaper, rather than buying a house now simply for the reason of having a "back-up".

 

[pickle pickle]

Has anyone considered buying a back up house?

Our house is worth about a mil. If my partner or I were to pass away there would be no way either of us could maintain it. It would be far wiser to sell and scale down to something half the size & cost.

If one is confident on house price growth, would it not make sense to purchase a back up house that you could move into if the $hit hits the fan? Are their any tax or CGT implications that would apply?

Not really. If the partner dies and cannot afford the upkeep they can sell the house and get something cheaper with the proceeds. If you are confident about capital growth and you can afford it, you buy an investment property. I guess that's a back up house.

The tax implications of buying a backup house is that the backup house will not be completly CGT exempt. The ATO's data matching is getting scary. Really scary.