PROS & CONS ? Pregnant daughter in law wants us to move with them in our IP.

I don’t know what you will say after reading this but believe or not, I am in an awkward situation. Our elder son and his wife decided to move from family home last August, We asked them to live in one of the IPs but they declined offer and started renting. Last week we came to know that our daughter in law is pregnant. Now they want to live with us but asking us to move in a 4X2 IP. Our PPOR is only 3X1 and their bed room is very small. My wife wants to do what ever they say. My son/his wife are suggesting us to move with them in one of our 4X2 IPs, they will pay the rent and we rent out our PPOR and what ever rent received, we give it to them. ( Situation could be like this. PPOR rent $350 per week. Current rent for 4X2 PI is $390 per week (lease expires in April). They pay the different $40 per week.) We live in their home because they rent it.
I do not know tax implications, I explained my wife that they may change their mind after 6-12 months. She says, no worries, we can go back to our home then. It is an emotional issue now and I am in minority in family. Can anybody please explain me pros and cons. I doubt there are any benefits except making my wife happy, more rooms for them, $260 saving for them and for me? A gift.....Grand child:D. I am happy to do this but if there are Tax related issues..............we could be in deep ****.
What should we do? ....................
Thanks.
 
You will be able to claim tax deductions on your current Ip if rented but you will have to declare the rent. If your loan is small this misght see you well out of pocket.
 
This sounds very messy to me with the only winners your son & his wife. I would not entertain this at all.
 
I just see it as adding unnecessary marital stress to both couples especially with a new baby soon on the scene.

A recipe for disaster - Don't do it!:eek:

Help each other in any other way you can, but don't change your lifestyle to suit someone else's plans.
 
Don't forget that families do stuff for each other. This is an intangible you have to factor in.

I am well aware of this Simon. That does not change the fact that the son & his wife are paying a minimal amount to live in the house, while the parents have the inconvenience and expense of moving, not once, but twice (when they go back to their PPOR).

It also changes the families dynamics. Living in the parents PPOR, they are the guests. Moving means that it is now the home of the son & his wife. This could become a power struggle depending on the personalities.

I am all for helping out a family member. Our family is now a one car family because our daughter's car was not worth fixing, so we have loaned her one of ours for the next 12 months. She also has a substantial loan from us which is interest free, as I don't want her to touch her nest egg. This, I believe is a hand-up, while what the posters son is proposing is a hand-out, where they live virtually rent free.
 
This sounds very messy to me with the only winners your son & his wife. I would not entertain this at all.

I agree with Skater. Without knowing all the facts or your family at all ipinvestor, I just wonder if they are taking advantage of you (I may be well off track here, and I apologise if I am). You offered to help them last year and they didn't want your help, they get themselves into a mess and now want to unsettle your life in order for them to fix theirs. A few things I would be wondering are:

1. How long is this setup for?
2. What happens when the baby arrives, will they take advantage of having live in babysitters? I know this is your grandchild and I am sure you will love to spend time with him/her but, I'm just thinking of someone I know, sometimes people can take advantage of that and then come to expect more help than you are able/want to give.
3. I pressume at least one of them is working, if not both. If they are only paying $40 per week, what are they doing with their money? Is this arrangement so they can continue to splurge or a genuine attempt for them to get ahead.
4. Do you really think the four of you can live together? Will there be issues with things such as household chores and other decisions to be made around the house. Is this then going to become you vs. them, and cause conflict. This could cause serious/permanent damage to your relationship with them.
5. By you bailing them out, and giving them a 'cruisy' option, is this really helping them stand on their own two feet and learning?

Personally, I think it is far too risky and exceeds what is expected of parents to do in order to help their children. You're not making them live on the street. I'd let them live in your current home for say 12 months whilst they save up enough to get them out of the financial problem they have got themselves into. 3 bedrooms might be a bit small and uncomfortable for four adults (plus baby), but if it's short term and you and your wife don't mind that as a short term solution, I'd be pushing for that. If THEY are uncomfortable with it and decline, then they really don't need/want/appreciate the help.
 
Can I ask what kind of cultural background you come from? I ask because I know a few different people from a few different cultures who happily live as a large extended family together. BUT from my own experiences and personal bias DO NOT DO IT!!!!

I (and my family) moved in with my parents and siblings for six months whilst waiting for our PPOR to be built. Now we get along great (always have) but even so it was seriously stressful for all involved. We had kids, but DH and I were already 'broken in' as parents so to speak and have no problem telling my parents to back off, and they have always been very reserved when it comes to interferring. Introducing a new baby to the family is extremely stressful as it is (particularly between mothers and grandmothers) even if everyone is on the same page. It is a completely new dynamic and it WILL cause friction in even the closest of relationships. You DIL and wife are veiwing things through rose coloured glasses at the moment, wait until there is conflict - there will be it is an unavoidable part of establishing a new family.

OK aside from that, I am fairly certain that it would most definitely cause a problem with the ATO. You could rent a room or charge them board, but to charge them rent for the lot and then live there yourself, most definitely reeks of tax avoidance - a very big 'no no' with the tax department. Give them a ring and they will tell you themselves, I am sure.
 
I think this has potential to be very messy. For a start I would maybe question the attitude that it is their house because they are renting it. to me it is your house because you own it and they only want to pay 40 rent.

Have you discussed who buys the groceries, who cooks , cleans, mows, pays bills etc. Do you have to pay the rates, insurance etc. What loan is on your current PPOR compared to the other property?

It comes across as very beneficial to them but maybe not so much for you guys.

It can be very stressful to share a house but I understand your motivation. DH and I have just had our eldest and her hubby move back in with us so that they can pay out some debts and start some savings. I don't know how it will end up but I am hoping for the best. We did thrash out a lot of ground rules beforehand and it is clear that they are living in MY house!

if you decide to go ahead, I wish you all the best.:)
 
I agree totally...they have made their bed and now want you to lay on and maintain it.

I just see it as adding unnecessary marital stress to both couples especially with a new baby soon on the scene.

A recipe for disaster - Don't do it!:eek:

Help each other in any other way you can, but don't change your lifestyle to suit someone else's plans.
 
I also agree with the others. They sound like they want it all their own way. You sound like you are happy to be around the new grandchild and your wife sounds like she will jump to whatever is asked.

There will be some who will say it is up to you as a family what you decide, and of course it is, but the mere fact that you are obviously not 100% happy and have asked the question means that there could be trouble ahead.

Of course, none of us know any more than what you have posted, but going purely on that, I would say they are asking a huge thing of you, to suit their own needs, without too much thought to your needs.

I would NEVER ask this of my parents.

Added to my comment is the fact that I realise that different cultures have different views on this multi-family living arrangement, so I wonder if there is something of that involved here too.

I realise you have couched your question in terms of only being concerned about the tax implications, and if that is the case, then you can ignore the answers here, as they are more expressing concern about from the lifestyle change and sacrifice (on your part) and do not really touch too much on the tax question.

If that is indeed your main concern, then your accountant would be the one to ask.
 
I do not know tax implications, I explained my wife that they may change their mind after 6-12 months. She says, no worries, we can go back to our home then. It is an emotional issue now and I am in minority in family..
Look at it this way if "She"the:rolleyes: wife is not happy,then i don't think you will be,plus six months goes very fast,or draw a line in the sand and say No,and go and stand on your own 2 feet and face reality like everybody else..
.willair.
 
Issue 1 is where do you and your wife prefer to live? If it is in your present home then you can make the offer for your son and his wife to move in with you, or rent one of your IPs.

If you really don't mind moving, I think the best option would be to share the 4x2 IP and have them pay you half the market rent ($195 per week).

This will make everything neat and clear for the tax dept, and also mean a financial gain for you by renting your PPOR (and also compensate for the moving and other removal expenses), as well as cheap rent for your son and his wife.

As you are officially sharing, the dynamics will be more even.

Congratulations on the coming little one, grandchildren are truly one of life's great joys.
Marg
 
Thanks for suggestions , My response of the questions are hi-lighted in RED. Thanks
I agree with Skater. Without knowing all the facts or your family at all ipinvestor, I just wonder if they are taking advantage of you (I may be well off track here, and I apologise if I am). You offered to help them last year and they didn't want your help, they get themselves into a mess and now want to unsettle your life in order for them to fix theirs. A few things I would be wondering are:

1. How long is this setup for? They say, if we move with them it could be a long term arrangement till they save enough for their PPOR.
2. What happens when the baby arrives, will they take advantage of having live in babysitters? We can help when we are free, we both are working. I know this is your grandchild and I am sure you will love to spend time with him/her but, I'm just thinking of someone I know, sometimes people can take advantage of that and then come to expect more help than you are able/want to give.
3. I pressume at least one of them is working, if not both. If they are only paying $40 per week, what are they doing with their money? Is this arrangement so they can continue to splurge or a genuine attempt for them to get ahead. They both are working but wife is working part time casual and she will leave the job soon.
4. Do you really think the four of you can live together? Not four, Five. My younger son also live with us. We never ever had any issue with daughter in law. Will there be issues with things such as household chores and other decisions to be made around the house. Is this then going to become you vs. them, and cause conflict. This could cause serious/permanent damage to your relationship with them. Son does not want to be part of family, that is only the problem, does not want to contribute.
5. By you bailing them out, and giving them a 'cruisy' option, is this really helping them stand on their own two feet and learning? We really want to help them.

Personally, I think it is far too risky and exceeds what is expected of parents to do in order to help their children. You're not making them live on the street. I'd let them live in your current home for say 12 months whilst they save up enough to get them out of the financial problem they have got themselves into. 3 bedrooms might be a bit small and uncomfortable for four adults (plus baby), but if it's short term and you and your wife don't mind that as a short term solution, I'd be pushing for that. If THEY are uncomfortable with it and decline, then they really don't need/want/appreciate the help.
 
Can I ask what kind of cultural background you come from? I ask because I know a few different people from a few different cultures who happily live as a large extended family together. BUT from my own experiences and personal bias DO NOT DO IT!!!!

I (and my family) moved in with my parents and siblings for six months whilst waiting for our PPOR to be built. Now we get along great (always have) but even so it was seriously stressful for all involved. We had kids, but DH and I were already 'broken in' as parents so to speak and have no problem telling my parents to back off, and they have always been very reserved when it comes to interferring. Introducing a new baby to the family is extremely stressful as it is (particularly between mothers and grandmothers) even if everyone is on the same page. It is a completely new dynamic and it WILL cause friction in even the closest of relationships. You DIL and wife are veiwing things through rose coloured glasses at the moment, wait until there is conflict - there will be it is an unavoidable part of establishing a new family.

OK aside from that, I am fairly certain that it would most definitely cause a problem with the ATO. You could rent a room or charge them board, but to charge them rent for the lot and then live there yourself, most definitely reeks of tax avoidance - a very big 'no no' with the tax department. Give them a ring and they will tell you themselves, I am sure.
Thanks Rug rat,
I can not save tax as I am on 45% tax bracket. I need to pay tax on income of PPOR and can not get tax deduction. We have not thought of hiding anything, Just need a solution.
Cultural back ground: East Asian
 
I think this has potential to be very messy. For a start I would maybe question the attitude that it is their house because they are renting it. to me it is your house because you own it and they only want to pay 40 rent.

Have you discussed who buys the groceries, who cooks , cleans, mows, pays bills etc. Do you have to pay the rates, insurance etc. What loan is on your current PPOR compared to the other property? We haven't discuss that matter yet because my wife does not want me to ask or say anything as DIL is pregnant. I think, my wife will buy groceries, cooking, cleaning etc and I will be doing other household works and bills will go from our account. It will be a tough time for me, if we choose that road.

It comes across as very beneficial to them but maybe not so much for you guys.

It can be very stressful to share a house but I understand your motivation. DH and I have just had our eldest and her hubby move back in with us so that they can pay out some debts and start some savings. I don't know how it will end up but I am hoping for the best. We did thrash out a lot of ground rules beforehand and it is clear that they are living in MY house!

if you decide to go ahead, I wish you all the best.:)
We haven't discuss that matter yet because my wife does not want me to ask or say anything as DIL is pregnant. I think, my wife will buy groceries, cooking, cleaning etc and I will be doing other household works and bills will go from our account. It will be a tough time for me, if we choose that road.
 
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