inherting a house @ 50% its value, need advice

[jpr777]

hi all,
My partner and I are buying out her sisters half of their fathers home so we can help her with her first deposit.( The two girls would of inherited the house at a later date any how.)
The father however will be living in this home, well forever so we wont be getting any income from this property. We can pay down this loan in two and a half years.
Our thoughts are it is automatically 50 % equity so why not.
Without talking to any one we are unsure of the loan structure to take for this house, and also the investment it might be and the deduction we could make.
any ideas
thankyou

 

[wylie]

Are you having it valued now, at the time you are buying her half?

Will your father now leave it totally to you in his will?

I don't know about type of loan, but it sounds messy. You are paying your sister for something she doesn't own, and something that you will not own once you have paid the money.

What if you have a falling out with your dad? You could be left with nothing.

Just get some good advice before doing this.

 

[BuildingBlocks]

Wylie's concerns will also vary in severity depending on how long it may be until the house is inherited.

If it was a year or two then it may not be as bad, but if you a waiting 5,10,20 years then an agreement today, which could potentially be changed at any time in a will, could be forgotten.

I think that the sister needs to wait, unless the house could be legally transferred now.

 

[Graingrower]

Whose name is the house going to be in? If it's kept in his name, personally I would be very uncomfortable. If it's not then he might feel a bit unsecure. He would be living rent free, but what security does he have.

 

[b simpson]

Can a condition be put in which ensures the house cannot be sold while the old man is alive and he gets free rent? That way the transfer could be done now if all parties are agreeable.

 

[Deltaberry]

Never do improperly documented deals with family.

Buy them out asap

 

[willair]

hi all,
My partner and I are buying out her sisters half of their fathers home so we can help her with her first deposit.( The two girls would of inherited the house at a later date any how.)
The father however will be living in this home, well forever so we wont be getting any income from this property. We can pay down this loan in two and a half years.
Our thoughts are it is automatically 50 % equity so why not.
Without talking to any one we are unsure of the loan structure to take for this house, and also the investment it might be and the deduction we could make.
any ideas
thankyou

It may also pay to do a small bit of foward thinking,what happens when this Man goes into a low or high care set-up,who will pay for the costs,something like this can become a real mess very quickly,and i have seen this happen before..

 

[Token Funder]

hi all,
My partner and I are buying out her sisters half of their fathers home so we can help her with her first deposit.( The two girls would of inherited the house at a later date any how.)
The father however will be living in this home, well forever so we wont be getting any income from this property. We can pay down this loan in two and a half years.
Our thoughts are it is automatically 50 % equity so why not.
Without talking to any one we are unsure of the loan structure to take for this house, and also the investment it might be and the deduction we could make.
any ideas
thankyou

First and foremost, whose names are on the title if the girls haven't inherited the property yet?

 

[Sheryn]

Seek professional advise

( The two girls would of inherited the house at a later date any how.) The father however will be living in this home, well forever so we wont be getting any income from this property.

Let gets the question straight.
Your partner's father owns his house outright with no mortgage, is in good health and expects to live another 20 - 40 years.
When the father dies his current will says the house goes to his 2 daughters.
Your partner's sister wants money now.

Your partner's sister wants you to subside her lifestyle now.

My answer would be NO - tell partner's sister she can save her own deposit and fund her own lifestyle.

I suggest you make an appointment with your accountant and then your lawyer as I would suggest both professionals would advise you against doing this unless you are extremely wealthy.

Family & friends can make funny suggestions and have weird expectations!

Your partner's sister is better of renting until she can increase her own income or going and living with her father to save a deposit or until he passes away.


Regards
Sheryn


One other thing if your partner's father is on a pension and he sells half of his house to you, the father will have his pension payments reduced by Centrelink and the government will only allow him to gift 30K over 5 years in total.

 

[Rolf Latham]

I can only echo what has been said here

Document and get good legal advice

This stuff almost ALWAYS ends in tears unless a clear exit strategy is in place

ta
rolf

 

[jpr777]

Wylie's concerns will also vary in severity depending on how long it may be until the house is inherited.

If it was a year or two then it may not be as bad, but if you a waiting 5,10,20 years then an agreement today, which could potentially be changed at any time in a will, could be forgotten.

I think that the sister needs to wait, unless the house could be legally transferred now.

yes sorry for being unclear the house will be transferred into our names straight away.

 

[jrc]

If your partner's father is on Centrelink benefits or likely to go on to thme this will possibly affect his pension as it will be a gift

 

[Token Funder]

yes sorry for being unclear the house will be transferred into our names straight away.

Ensure you father has independent legal advice and his ongoing interest is documented.
Understand that, assuming the above gets up, your father will have a life interest which will limit the ability for you to borrow against the security.

 

[pennyk]

As others have said, I think this is really messy and could end up with your father being in financial disaster down the track.
I would think about giving a loan to the sister, to help her along, so long as it was documented. But to transfer ownership of the father's property, with all the potential problems with centrelink/care fees down the track/ him needing to live in the property etc just seems to be asking for disaster.

 

[whitehope06]

Don't do it !!!
You are asking for trouble !!!

 

[Graingrower]

Maybe your partners father could borrow against his house to help his other daughter out. His will could leave a larger proportion of the estate to your partner stating that he helped her out earlier.

 

[AngelMoo]

So the father's house will be given to you and you'll take a loan of 50% of the house value to buy out the sister's share? then the house will be 100% yours with the father having lifelong tenancy?

Depending on your family relationships it could work or it could blow up, much professional advice is definitely needed