Home Loan and LAND TAX with 1% ownership

so just wonder what the member think of this.
A friend wants to assist his daughter to purchase a property worth $500000.00.
Land value approxiamately $200000.00
A friend current land value on his current equity, for the land tax purpose is just exactly $400000.00.
To borrow money the Equity will not be an issue, cause this friend has plenty.
Servicibility is an issue cause daughter's income is very low.
gross $45000.00/annum.
What do you think my suggestion below:
Friend become a guarantor to the property as well as become a part owner with 1% interest in it.
That way home loan can be approved cause there are two income to service the loan.
Land tax will not be an issue to this friend cause the 1% ownership will not make this friend liable to land tax cause the way i see it that land value for the propose house is
$200000 X 1%=$2000.00.
My calculation is that the land value for land tax purpose is
$400000.00 + $2000= so total land value to this friend will be $402000.00
Can the member confirm whether or not this calculation is correct?
Is there other tax implication that has not been considered on this scenario?

t
 
You don?t state the State the land will be in.
You don?t pay land tax on equity, only on land.

If he is an owner of the property no need to be a guarantor.

If NSW the joint owners of the land will be assessed as the primary owners and then each person?s share of the land will be assess and added to their other land holdings.

So there may be no land tax payable even if the land is in NSW, and no land tax on the friend?s side either as a secondary tax pay on his total land holdings.
 
You don?t state the State the land will be in.
You don?t pay land tax on equity, only on land.

If he is an owner of the property no need to be a guarantor.

If NSW the joint owners of the land will be assessed as the primary owners and then each person?s share of the land will be assess and added to their other land holdings.

So there may be no land tax payable even if the land is in NSW, and no land tax on the friend?s side either as a secondary tax pay on his total land holdings.

Hi Terry

Yeah. All properties are in NSW.
So it appeared that the 1% ownership is a good idea.
It is good to know that my calculation in regards to this friend's land tax liability is correct
Friend's land value is $402000
Daughter's land value is $198000
All below threshold..

t
 
I won't comment on the NSW land tax as if it is similar to Vic, the way the SRO assesses land tax is somewhat heavily favoured to their benefit and not immediately logical.

Lenders no longer accept service guarantees, so the parent may well need to go onto title, however not that many lenders easily accept a 99/1% split unless there is a perceived benefit to all parties.

Where are they getting the deposit to settle from? Keeping away from mortgage insurer territory will assist however in lender policies.
 
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