I'm new to property investment but have been gathering some knowledge to prepare for purchasing my first IP this year. I've been a lurker here for a little while and have been reading Jan's "More Wealth...." and other books.
A situation has just come up which alters my IP plans a little and I'd like to see what others think.
My 75-80 yo parents have agreed to move the 700kms to Brisbane to live near my wife and I. They will be buying into the higher priced market in Bris so we need a good plan to make this all happen (i caught the bear now I have to cook it...)
They own their PPOR, have no IPs or major investments. They live off pension, small super stream and a small term dep. They live simply but comfortably. They would get around $300k for their PPOR.
I am trying to figure out my options to help make up the difference in their brisbane purchase in manner that is tax effective etc for me and moves me down the path to having IPs (eg buy part of the new place with them and set up somehow as an IP).
My circumstances: 40yo married SINK. We have a $500k PPOR with a 190k P&I loan remaining. We use an offset and my gross income is about $130k pa
My initial idea is to have them sell and stay with us while they find a place they like. So them having 300k in the bank will probably effect their pension etc for while but living with us they'll have little expenses. For simplicity lets assume they find $400k house. The plan would be they put in the 300k and I would get an LOC on the PPOR to fund buying costs and an IO IP loan for 80k (80% LVR) and own 1/4 of it. But all this relies somehow on making it tax deductible and this is where I'm confused. They would own 80% of their PPOR but have to pay me a rent of some amount for me to claim any tax etc.
I realise we need to talk to centrelink, accountant, lawyer etc, but initially I just want to know if I'm way off base with my idea or if any other ideas are out there. I'm sure I'm not the first to encounter this situation.
PS i'm their only child so there are no complicated estate planning issues as such for them
Thanks
A situation has just come up which alters my IP plans a little and I'd like to see what others think.
My 75-80 yo parents have agreed to move the 700kms to Brisbane to live near my wife and I. They will be buying into the higher priced market in Bris so we need a good plan to make this all happen (i caught the bear now I have to cook it...)
They own their PPOR, have no IPs or major investments. They live off pension, small super stream and a small term dep. They live simply but comfortably. They would get around $300k for their PPOR.
I am trying to figure out my options to help make up the difference in their brisbane purchase in manner that is tax effective etc for me and moves me down the path to having IPs (eg buy part of the new place with them and set up somehow as an IP).
My circumstances: 40yo married SINK. We have a $500k PPOR with a 190k P&I loan remaining. We use an offset and my gross income is about $130k pa
My initial idea is to have them sell and stay with us while they find a place they like. So them having 300k in the bank will probably effect their pension etc for while but living with us they'll have little expenses. For simplicity lets assume they find $400k house. The plan would be they put in the 300k and I would get an LOC on the PPOR to fund buying costs and an IO IP loan for 80k (80% LVR) and own 1/4 of it. But all this relies somehow on making it tax deductible and this is where I'm confused. They would own 80% of their PPOR but have to pay me a rent of some amount for me to claim any tax etc.
I realise we need to talk to centrelink, accountant, lawyer etc, but initially I just want to know if I'm way off base with my idea or if any other ideas are out there. I'm sure I'm not the first to encounter this situation.
PS i'm their only child so there are no complicated estate planning issues as such for them
Thanks