I am trying to help my parents' and their situation is as follows. The basic aim is to upgrade the house, whilst losing the least super for the least amount of hassle (tall order, I know, but worth looking into). I am trying to convince them to go to a tax accountant to get some figures and advice, but if anyone here has some rough ideas or advice it would be appreciated (and will help me decide whether I keep suggesting they look at keeping their old property for now).
Current PPOR - valued at 450-470K and owned outright - is 30+ years old, with new kitchen, deck, tiled floors. They have owned this since new, but are looking to move to a lowset place for retirement (in same suburb -within 14km of city, close to transport, shops).
Prospective new property is 5yo, on market for 540K - probably don't want to pay more than 520 though (as a side issue, does anyone here offer list price for a property? Is there an average amount to go below it when offering?).
1 parent is retired, with about 400K left in super; the other works p/t and earns about 40K a year, with maybe 50K in super that can't be touched yet. (and I don't think they will be eligible for pension for 7 or so years). They do not want to touch the super if at all possible as they are worried the super won't last till pension age - its also a bit of a security blanket I think, but to buy newer house they will end up 100K+ short.
So, which option seems the best (if even possible)?
1. Borrow the 100K or so, sell old place.
2. Use super for the 100K or so and sell old place?
3. Borrow 520K (but use it to 'pay' for the old property, and transfer the equity from the old one to the new one, with the extra 100K) and keep the old PPOR and use it as an investment for a couple of years (rent appro. 400wk)? My thoughts with this were that hopefully property will come up a bit (or inflation) and that they might recoup a bit more of the 100K difference, without touching the super. Deducting interest, etc, would not work out as good obviously as if both parties were working as one has no income. How would we go about this? (I should also say that the simplest way is what we I am hoping for - if it goes into anything other than 50%shares in each property between the 2 it will get too messy for them)
Thanks for any advice or strategies you can think of!
Current PPOR - valued at 450-470K and owned outright - is 30+ years old, with new kitchen, deck, tiled floors. They have owned this since new, but are looking to move to a lowset place for retirement (in same suburb -within 14km of city, close to transport, shops).
Prospective new property is 5yo, on market for 540K - probably don't want to pay more than 520 though (as a side issue, does anyone here offer list price for a property? Is there an average amount to go below it when offering?).
1 parent is retired, with about 400K left in super; the other works p/t and earns about 40K a year, with maybe 50K in super that can't be touched yet. (and I don't think they will be eligible for pension for 7 or so years). They do not want to touch the super if at all possible as they are worried the super won't last till pension age - its also a bit of a security blanket I think, but to buy newer house they will end up 100K+ short.
So, which option seems the best (if even possible)?
1. Borrow the 100K or so, sell old place.
2. Use super for the 100K or so and sell old place?
3. Borrow 520K (but use it to 'pay' for the old property, and transfer the equity from the old one to the new one, with the extra 100K) and keep the old PPOR and use it as an investment for a couple of years (rent appro. 400wk)? My thoughts with this were that hopefully property will come up a bit (or inflation) and that they might recoup a bit more of the 100K difference, without touching the super. Deducting interest, etc, would not work out as good obviously as if both parties were working as one has no income. How would we go about this? (I should also say that the simplest way is what we I am hoping for - if it goes into anything other than 50%shares in each property between the 2 it will get too messy for them)
Thanks for any advice or strategies you can think of!