Sharing with sibling for first property - advise needed

Hi all, I've been wanting to get a property for awhile now but my income has always been an issue (about $40k/pa after taxes). My sibling, who is living in NZ and is a resident there, is thinking of giving me a helping hand.
The idea was to put the loan and property solely under her name although we would be sharing, while I lived in one room and rented out another. I'm reluctant to put my own name down as I have a FirstHome Saver account which would not mature till next financial year.
Is this a good idea?
Has anyone come across a similar scenario? It sounds like it might be fraught with complications but i can't see any other way to get ahead.

Furthermore, my sibling isn't a citizen nor resident of Australia, only I am.
I am not sure if there are any Foreign Investment Board restrictions. Please advise. Thanks.
 
Both hands is closer to the mark.
The idea was to put the loan and property solely under her name although we would be sharing, while I lived in one room and rented out another. I'm reluctant to put my own name down as I have a FirstHome Saver account which would not mature till next financial year.
Is this a good idea?

For you the answer is probably yes if you don't mind the prospect of share accomodation. For your sister it would involve her purchasing the property as an IP and taking out a loan in her name. she would have to weigh up the tax consequences which would probably be minimal over here as net income would be minimal I would say. As there would be a 3rd party sharing the rent she would need to allow for the other room being vacant some of the time.
Has anyone come across a similar scenario? It sounds like it might be fraught with complications but i can't see any other way to get ahead.
Furthermore, my sibling isn't a citizen nor resident of Australia, only I am.
I am not sure if there are any Foreign Investment Board restrictions. Please advise. Thanks
.

Being from NZ she has residency here also so i don't believe FIRB approval will be required. http://www.firb.gov.au/content/Exemptions/exemptions.asp

Once you decide to buy your own place your sister will then have a stand alone IP here in Australia. Will she want to keep it or sell? She'd need to weigh up the initial costs in purchasing and any Capital gains payable.


Regards
Steve
 
Being from NZ she has residency here also so i don't believe FIRB approval will be required. http://www.firb.gov.au/content/Exemptions/exemptions.asp

Once you decide to buy your own place your sister will then have a stand alone IP here in Australia. Will she want to keep it or sell? She'd need to weigh up the initial costs in purchasing and any Capital gains payable.


Regards
Steve


Hi Steve,

Thanks for the advice. But she is only a resident and not a citizen of NZ so I think that pretty much cancels out any chance of us splitting the mortgage according to the FIRB link. :(
 
Whats in it for you if I might ask? What is the benifit in being the lead tenant in a share house?

No benefit in being the lead tenant. Only that she earns much more than me so we were trying to go down the way of her taking out the loan. On paper, it would be her name but really we would be sharing the repayments. It would be less for her as the other room will be rented out to a 3rd party and that would help cover her portion of the repayment.
 
Why would you share the repayments on a property that belonged to someone else, even if that someone else is your sister?
Marg
 
Hi Marg,
On paper it would belong to her but if I help out with the repayments, we agree to split whatever capital gains/ equity in the future between ourselves. I know it must sound silly but i'm not sure if there's a better way to do it... :confused:

Come to think of it the FHS account only offers $3400 max over a period of 4 financial years with $5000 invested pa. In the larger scheme of things, 4 years is a lot of capital gain in the life of a property, so what could the $3400 really do in the long run. So i'm thinking we might forego the account and just put my name down for the moment. But that would cap our loan amount significantly because my income is much less than hers. Would it be better then to revert to the original plan???
 
what happens if your sister has to sell the place, and it has gone down in value since purchase - can you afford to wear the losses on a small income?

unfortunately not everyone has the finances to own their own place. the whole scenario just seems a bit shaky
 
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