Can I buy my parents property for a discount?

Discussion in 'Legal Issues' started by undercover, 3rd Dec, 2008.

  1. lizzie

    lizzie when i grow up ...

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    i can't see a problem with what you are doing - everyone is happy. just be aware of kristine's advice regarding stamp duty and, as no one has pointed out yet, be aware of the capital gains issue.

    if you ever sell in the future your base cost will be $100,000 lower than if you have paid market value - so you gain will be $100,000 greater.

    but by saving interest repayments on the extra $100k, and the investing opportunities it may open up for you in the future by having extra cash in pocket would probably outweigh this issue.

    just be aware of them so they don't bite you.
     
  2. undercover

    undercover Member

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    Thanks Lizzie,

    Well hopefully I can make some decent money with this property to help them out later in life.
     
  3. Terryw

    Terryw Investor

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    Undercover,

    If this was your parent's main residence, then they may be CGT exempt - maybe you should consider paying as much as you can for it. This will mean less CGT when you sell later on (assuming it is not exempt).

    Incidentally, one of my clients purchased her mother's house in NSW recently and her solicitor insisted she obtain her own valuation for stamp duty purposes.
     
  4. tubs

    tubs Member

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    Can we please stick to the question?

    Sorry to have to make this observation, but if someone asks a question like this, I can't see how questions like:
    - Are your parents aware of what the property's worth?
    - DO you have other siblings who would be annoyed?
    - How much money do your parents have?
    etc etc are relevant.

    Can't we just help out other people by sticking to the question, and keeping out of the personal and irrelevant bits.

    Anyway, a valuation or two is the best, particularly if you let the valuer know why you're doing it. They might come in on the low side. Then you should be able to justify a further discount because of no real estate agent fees, the guarantee of an instant sale rather than a lengthy sale process and the flexible settlement terms.

    But double check this with an accountant first to confirm how low you think you can go.
     
  5. wylie

    wylie Member

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    If people only stuck strictly to the question being asked, there would potentially be many issues involved that possibly had not been considered.

    I don't have a problem with the slightly off-tangent posts (one of those that you see as "irrelevant" being mine) because until you brainstorm what possible problems might arise (not just financial ones) the person asking the question might not realise the ramifications involved.

    Of course, they can censor the answers themselves. People are trying to help.
     
  6. Y33

    Y33 Y33

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    Undercover,

    You may be able add your name to the title instead of buying.

    Your parents only want to cover their current payments so why not take this over instead.

    Any rent from the property can be split with them.
     
  7. lizzie

    lizzie when i grow up ...

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    ... because that would be a tax and accountability nightmare for both parties.