Upsizing house with Parents

HAL on 19/08/2014 - 20:31
Last edited 19/08/2014 - 20:33

Hi All,

Just want to get some advice in regards to upsizing with my parents.

Currently my parents want to sell their place and move into a bigger place together.

Parents are on a disability pension and that's their main source of income, hence I will be paying off the mortgage but they will contribute the money from their primary residence to the loan, ~50% of the loan will be paid off with their share.

I would prefer the title of the new place to be in my name (first home buyers and parents are ok with this), but that means they will have to give me the sale of the primary residence as a "gift"? (Tax + Pension implications)

I'm trying to get some advice on:

  1. Avoiding any taxes on sale of primary residence (my understanding is there are none).
  2. Avoiding my parents losing their disability pension.
  3. What are the implications of them gifting me the money from the sale of their primary residence? (tax?)
  4. Is it wise to put the title solely in my name with my parents contributing 50%? (Centrelink I believe sees this as my parents giving me a big lump sum, it affects their payment).

Greatly appreciate if someone can shine some light.

Thanks!

Financial

Comments

  • PVA on 19/08/2014 - 20:35
    +1

    I wouldn't know but I would not risk it from advice from anyone here, no matter how genuine and informed. It is a big thing you may mess up, with pensions etc disappearing.
    Can an accountant help and after that centrelink (proper appointment not just questions over the phone)?

    • HAL on 19/08/2014 - 20:55

      I do plan to call centrelink soon, but thought it would be better to ring them with after I did some research. :)

      The funny thing is my girlfriend is an accountant, not a taxation one though unfortunately.

  • maximum on 19/08/2014 - 20:51

    Ring centrelink ask for an appointment with the financial information services section. It's free and the information is correct.

    • HAL on 19/08/2014 - 20:59

      excellent didn't know that dept existed! Thanks

  • HAL on 27/08/2014 - 21:06
    +1

    FYI for anyone else that might have a similar question.

    Granny flat arrangement solves my problem. (http://thesmartmoney.com.au/granny-flats-and-centrelink/)

    Parents can sell their primary residence and help me pay my mortgage, I just need to guarantee they can live at the new place for the rest of their lives.

    This won't affect their pension and allow me to get the first home owner's grant.

    Financial Information Service department of Centrelink is definitely the place to call, make sure you are transferred to an agent at the office and not a branch. (Branch were terrible gave me the wrong info and told me to visit a branch where no one could help).

  • Geewhizz on 29/08/2014 - 07:02

    make sure you are transferred to an agent at the office and not a branch.

    Minor detail, but I don't think you'd actually get a say in where your call goes. Your call could go to anywhere in Australia, depending on who was rostered on to do what on any given day.

    Branch were terrible gave me the wrong info and told me to visit a branch where no one could help

    Just out of interest, did you speak to a FSO (Financial Services Officer) at the branch?

    • HAL on 29/08/2014 - 11:23
      +1

      Obviously it depends on who is available but you can ask nicely and request someone in the office, I did it twice I just explained how my first call to a branch didn't help.

      The branch I went to didn't have a FSO (I was told otherwise over the phone before going there), I used the phone whilst waiting in line and got directly through to the FIS.

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