From: Robert Forward
This one is for the accountants out there, and anyone else wanting to put a comment or two in as well.
I do intend on talking with my accountant in the next few days but but have been busy, anyway I thought I'd put this to everyone in here to.
SCENARIO:
SETUP:
Grandpa owns house, he receives minimal rent for it to retain receiving the pension. However the tenants (relations) pay part of grandpa's retirement village rent too. The minimal rent goes to the Grandpa's son to spend anyway. The tenants are moving out soon as they've built their own "dream" home and the property will be vacant.
In I come:
We are offering to buy the property off Grandpa on a Lease Option. Now I've only learnt of the above today (other then the cheap rent). The dilemma that we need to get around is, if I pay minimal rent to Grandpa and an "Option" fee. Is this option fee classed as "Rent" or is it classed as returning of "Capital" from the property. Grandpa has owned this property for 30 odd years and no I think CGT does not apply, he won't have to pay it as he has owned it for so long.
Question: How can we structure it so that Grandpa retains his pension and we can retain the property on a "Lease Option" style purchase. Can it be said that we are living there paying "$x's" in rent whilst building up the deposit to purchase the property, it's just we are handing the $$$'s, deposit over to Grandpa weekly and allowing him to spend it.
And yes, I will be placing caveats over the property if we go ahead with it for personal protection. And having fully documented details of all transactions.
Cheers
Robert
The Sydney "Freestylers" Group Leader.
This one is for the accountants out there, and anyone else wanting to put a comment or two in as well.
I do intend on talking with my accountant in the next few days but but have been busy, anyway I thought I'd put this to everyone in here to.
SCENARIO:
SETUP:
Grandpa owns house, he receives minimal rent for it to retain receiving the pension. However the tenants (relations) pay part of grandpa's retirement village rent too. The minimal rent goes to the Grandpa's son to spend anyway. The tenants are moving out soon as they've built their own "dream" home and the property will be vacant.
In I come:
We are offering to buy the property off Grandpa on a Lease Option. Now I've only learnt of the above today (other then the cheap rent). The dilemma that we need to get around is, if I pay minimal rent to Grandpa and an "Option" fee. Is this option fee classed as "Rent" or is it classed as returning of "Capital" from the property. Grandpa has owned this property for 30 odd years and no I think CGT does not apply, he won't have to pay it as he has owned it for so long.
Question: How can we structure it so that Grandpa retains his pension and we can retain the property on a "Lease Option" style purchase. Can it be said that we are living there paying "$x's" in rent whilst building up the deposit to purchase the property, it's just we are handing the $$$'s, deposit over to Grandpa weekly and allowing him to spend it.
And yes, I will be placing caveats over the property if we go ahead with it for personal protection. And having fully documented details of all transactions.
Cheers
Robert
The Sydney "Freestylers" Group Leader.
Last edited by a moderator: