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From: Anonymous


How old do you have to be before you can buy property or have property in your name?

Ta
 
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Reply: 1
From: Brent H.


Err.. Tough one.

There are ways around things like age.
But with property you either have to be old enough to sign a legal document (ie - 18), or have someone and/or some structure in place to do it for you.

Cheers

~Brent
 
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Reply: 1.1
From: Asy .


Sorry Brent, but not quite..

I Victoria, you can be any age to hold property, ie you can buy a house for a 2yo. However, the Title will show the age of any minor. E.G: Joe Smith (2 year old minor).
The difficulty comes when and if you want to sell the property as there is some conjecture over whether a minor can sell property without a guardian's signature. You would be able, as Joe's guardian, to sell the property, but there would be no guarantee that, when Joe grows up, he doesn't claim that the sale was not in his best interest, and take legal action.

asy.
 
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Reply: 1.1.1
From: Simon H


It is possible for a minor to own property. This is for NSW from Land and Property Information.

Any dealing in favour of a minor must include the date of birth as well as the name.

A minor cannot be appointed as a trustee. Any dealing involving a trustee who is known to be a minor will not be registered.

A dealing in favour of a minor will not be registered unless:
*it is authorised by an Order of Court or by a statute; or
*it is supported by a certificate given by an independent solicitor or the Public Trustee.
The certificate must state that:
1.the minor understands the intention and effect of the dealing.
2.the minor makes the dealing freely and voluntarily.
3.the consideration is not manifestly excessive.

A dealing in favour of a minor, not executed by the minor, must be executed by the minor's father and mother, and their capacity must be stated.

The form of notification must include the words "a minor born...." after the minor's name. On attainment of the age of 18 years the words "a minor born...." may be removed.

Hope this helps
Simon H
 
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Reply: 1.1.2
From: Jude H


Hi Asy,

Do you have a web site (or any other reference)where I could get more info on minors purchasing property please.

Jude

~ Never take no for an answer from someone not empowered to say yes ~
 
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Reply: 1.1.3
From: Apprentice Millionaire


Hi Asy,

>I Victoria, you can be any age to hold property, ie you can buy a house for a 2yo.
>However, the Title will show the age of any minor. E.G: Joe Smith (2 year old minor).

That's interesting. So I could go out and buy a property in my son's name (15 yo) and get him to benefit from the FHOG? Is that correct? If so, wouldn't there be another hurdle: would a bank lend to a minor? How does one overcome that? Mortgage in parent's name?

>You would be able, as Joe's guardian, to sell the property, but there would be
>no guarantee that, when Joe grows up, he doesn't claim that the sale was not in his
>best interest, and take legal action.

Well Joe being 15yo, I can work with him, and we can discuss pros and cons. And as he is my son, he wouldn't want to sue me: I would wipe him off my will :) :)

Cheers
Apprentice Millionaire
 
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Reply: 1.1.3.1
From: Vicki .


Hi
I also thought of doing the same with my 15yo but found out that you have to be 16yo to get the FHOG. :-(
 
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Reply: 1.1.3.1.1
From: Jude H


Thanks for the links AM. Difficult to read but it appears that it can be done.

Rolf and Victor,

Can you help us out on this one?

What about serviceability? Will the banks lend to a 16 yo (will they lend younger?) if their name is on mortgage with parents as guarantor? Does this come under difficult to do but it can be done?

Jude

~ Never take no for an answer from someone not empowered to say yes ~
 
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Sim

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Reply: 1.1.3.1.2
From: Sim' Hampel


More the point I feel is how you intend for the minor to service the loan. Or indeed how you intend to actually get them a loan in the first place.

Aren't there laws about providing credit to minors ?

Is going guarantor on a loan the best thing to be doing ? Or even possible ?

What about income from the property ? There are laws in place to prevent parents holding assets in their children's names as a means to minimise tax. And indeed, aren't there quite severe taxation issues involved ?

Don't get me wrong, I'm not against kids holding property, but I am VERY against kids being put into a financial situation that they have little control over for what ever contrived reason. Especially if things go wrong and everyone gets hurt (including the child's credit rating).

Okay... so how will you finance the property purchase ? (assuming title is in childs name... which it has to be to get the grant - your name cannot be on title if you already own other property)

1. Cash - well if you have enough cash to purchase the property outright and get the 7K/14K for free then not a problem I guess.

2. Mortgage in minor's name - well that isn't going to (legally) happen I don't think.

3. Mortgage in minor's name with guarantee from yourself - from what I've been told this is also not likely to happen. There are credit issues with the minor involved, and other guarantor issues that the regular banks will be very very wary of (public relations nightmare when they have to forclose on the loan because the borrower defaulted and the guarantor loses their house as well). There are non-traditional lenders who may be game enough to take it on however, so it is theoretically possible.

4. Mortgage in your name on property with minor on title. This is a difficult one too, as I also believe that there is a security issue. Banks will generally not lend money against a security held in someone elses name. Again, there may be ways around it, but you will need to look hard I think.

5. Buy using a lease/option - not an option for the FHOG anyway (you don't get title until you exercise the option - by which time the grant may have ended)

6. Buy using a wraparound mortgage - I guess in theory that provided you can convince a wrapper to take on the risk of providing credit to a minor (may be some legal issues there), you could purchase a property this way and get the FHOG.

I think that the FHOG is a nice thing if you can get it, but I question the reasoning behind some of the legal and ethical contortions people will attempt to perform in order to get their hands on this money. Sounds like greed to me. Don't forget to consider the ramifications if things go wrong. Please don't screw things up for your kids through your own greed.

That being said, if someone comes up with an elegant solution to the issue, please share it with us all... it's something a lot of people can benefit from if the right solution is found. Might be worth talking to some professional and getting good advice... pay them to find a way to make it work !

 
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Reply: 1.1.3.1.2.1
From: Jude H


Sim,

It appears that your reply is directed to my post. If you care to reread it, at no point did I mention FHOG. That is because it is not being considered. My question is not so that I can find some legal loophole through which to buy another property, it was written at my son's request with the hope of finding out all information possible (due diligence) so that he can buy a property in his name at the youngest age possible.

Serviceability? Is holding a 2 year part time job good enough? I don't know sim so I asked the question.

Jude

~ Never take no for an answer from someone not empowered to say yes ~
 
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Reply: 1.1.3.1.1.1
From: Rolf Latham


Hi Jude

Some lenders will look at third party guarantees where:

1. all parties get individual legal and financial advice
2. Where there is relationship by blood or marriage.

The consumer credit code and soem recent court judgements make these things diff but not impossible.

I do not know of a mainstream lender that would do this.

Ta

Rolf
 
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Reply: 1.1.3.1.1.1.1
From: Jude H



Thanks for the info Rolf, appreciate your help. Do we need to look at no Fin lenders then? They want min 20% don't they?

Jude

~ Never take no for an answer from someone not empowered to say yes ~
 
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Reply: 1.1.3.1.2.1.1
From: Sergey Golovin


Please pay attention to -

"None of the applicants or applicant's spouse can have previously received the grant; and ...owned a home…"

Sounds like you are not eligible if someone (one of the partners) already have property.

Only way to do it is to find boy older single youngish girl or boy as “partner” sort of speak, never owned a property.
Only if mum will agree with that concept, ofcourse.

I think.

Serge.











Pathway: ACTGovernment Home Revenue Office Home

Department of Treasury -
ACT Revenue Office

First Home Owner Grant (FHOG)

Frequently Asked Questions

What is the Scheme?

The First Home Owner Grant (FHOG) is a one off $7000 grant payable to eligible first homeowners on the purchase or construction of their first home.

Why was it introduced?

FHOG is an initiative agreed between the States and Territories and the Commonwealth Government to offset the impact of the GST by providing a grant to assist people to purchase their first home.

When did the Scheme commence?

1 July 2000.

What is the eligibility criteria?

To qualify for a grant:

The Applicant must be a Natural Person, ie not a Company or Trust; and
An applicant (or at least one of the applicants) must be an Australian citizen or permanent resident; and
None of the applicants or applicant's spouse can have previously received the grant; and
None of the applicants or applicant's spouse can have previously owned a home, either jointly or separately, or with another person; and
The contract for the purchase or construction of a home must be signed on or after 1 July 2000, or in the case of an owner builder, construction must not have commenced until on or after 1 July 2000.
Who is NOT eligible?

An applicant does not qualify for a grant if:

They live in Australia on a long term visa; or
Is a company or trust, except where the application is made on behalf of a person with a legal disability; or
There is no payment to purchase the home, for example, if the home was inherited or gifted from another person.
The purchase of what type of property qualifies an applicant?

The property being purchased or constructed must be done so as to be occupied as a residence. This includes:

A new or established house; or
A home unit; or
A self-contained fixed dwelling; or
Demountable dwellings and Re-locatable homes where these meet local planning standards; or
Shared equity arrangements; or
A property used for both residential and commercial purposes.
Note: The property to which the grant applies MUST be used within 12 months of grant payment as the "principal place of residence" for the applicants.

The purchase of what type of property DOES NOT qualify an applicant?

Land; or
An investment property that will not be used as the "principal place of residence".
 
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Reply: 1.1.3.1.1.1.1.1
From: Rolf Latham


Hi Jude

Its not the serviceability thats the issue.

Technically, a minor cannot enter a contract for finance.

This means a guarantor would need to be used to guarantee the loan. No docs loans and guarantees dont go well together, but Im sure theres always a first time.

The guarantor must have a level of serviceablity to be able to meet the guarantee should it ever be exercised.

First port of call needs to be your normal everyday lender - always give them the ooportunity.

Ta

Rolf
 
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Sim

Administrator
Reply: 1.1.3.1.2.1.2
From: Sim' Hampel


Actually Jude, I was not replying directly to you, just discussing the concept in general.

 
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Reply: 1.1.3.1.2.1.2.1
From: Sergey Golovin


Sounds like we have exhausted all our options.

What about Family Trust or couple'm?

Serge.
 
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