Buying brothers half of unit

[williatn]

My brother has decided that he wants to sell his half of our unit in Sydney. At present it is still my 'primary place of residence' as i live in my now wife's house in brisbane (still less then 6 years since i left the Sydney unit).

Two questions:

1. What are the costs if i buy him out other then the unit costs? Can i avoid stamp duty and the host of other costs?

2. As my wife will probably be on the new mortgage this would turn the property into an IP - correct? CGT will be payable on the increase of value from the purchase from my brother?

Thanks!

 

[marg4000]

You and your wife can only have one PPOR at a time, so if you are living in your wife's house then that is your PPOR for CGT purposes.

CGT will be calculated on the increase in price from the date your moved into your wife's house.

Or you can elect to have your half share in your unit in Sydney as your joint PPOR and pay CGT on your wife's house, which I don't think would be the better solution.

You will have to buy out your brother and pay the stamp duty. Obviously you won't have agent's commission, but all other costs will apply.

You will then have two CGT calculations - the increase in value from when you moved out for your half, and the increase from the price you pay for your brother's half.

Sounds as if it would be a good idea to consult your accountant.
Marg

 

[williatn]

Thanks Marg

Does it not make a difference if the properties are in different names? The sydney unit is in my name and the house in my wife's. i was paying rent to her up until our marriage but haven't for the last 8 months.

What a mess... any profits are being eaten away. i guess that saying 'time in the market not timing the market' comes into play. hopefully i can buy him out and then wait ten years for the equity to build again.

Thanks for your help.

 

[TheCamel]

makes noo difference whose name the property is in, as you're married.
even if you were paying rent, you were in a defacto arrangement by the sounds of it, so they could still claim then that you weren't paying rent, you were paying towards the mortgage.

Of course, i'm sure your wife has all the rent receipts, and has filed appropriately with the ato that you were paying rent all that time, right ?


(more general forum than PM forum i suspect also)