I'm looking to see if anyone has any experience in transferring a home loan / property to a relative. I want to transfer my existing home loan under my parents name (while avoiding stamp duty and any other significant costs), simply for the reason of being able to increase my total serviceability to purchase a new place under my own name.
Couldnt find any other posts that fully cover whats involved.
transferring a home loan / property to a relative
This is called selling - the actual price paid is irrelevant, and could be $0.00.
avoiding stamp duty and any other significant costs
You can't, if they are purchasing your property (even if the actual price paid is $0.00), they will still need to pay stamp duty on the value of the property.
Correct. You will need to pay stamp duty at "market value" … could easily be $50k+.
The usual way to increase serviceability is to purchase the property as an investment and therefore the projected rental is added to your income/servicing ability. (Be aware though that it will then be assumed that your current expense base that presumably includes rent will stay as is).
There's a whole swag of other considerations here, but rest assured, the government will always get their bit.
How about you take the asset and leverage it to buy another asset?
Use the parents as guarantors.
Not sure how it is in other states, but in NSW the only way to dodge stamp duty is if you die and leave it as inheritance. Marrying your parent will technically work too, I guess.
That being said there is some talk about removing it and replacing it with a property tax, but who knows really if it's gonna happen.
Couldnt find any other posts that fully cover whats involved.
If it's not on Oz bargain it's not…..
western union
Firstly, gifting title to you
https://www.realestate.com.au/advice/how-to-transfer-a-prope…
In doing so your parents release the mortgage and you have to take over the mortgage.
There will be fees involved.
"I want to transfer my existing home loan under my parents name " I'm confused - I gather that the loan is in your name now, not your parents' and you want to transfer it to them?
If that's the case - heads up - you can't. They would need to take out a loan in their own names to pay yours back, using the property being transferred to them as security. Assuming they can afford it.
Are your parents going to be paying for the loan? Loan serviceability is purely your ability to service the debt, with interest rate rises coming in the near future if you can't service both loans then you probably shouldn't be buying another property to begin with. If you tell them that you're not going to be paying it but really still are, you're opening yourself up for a world of pain down the road.
Also opens your parents up to a pile of risk on your behalf. Are they quite clear on what you're doing here?
Good luck OP
There is no way to avoid stamp duty or any associated taxes (unless they pass away and pass it to you then).
The only way to transfer the house is essentially to sell it to you. This can be done without having to 'transfer' any real money around but the house will need to be valuated and that will be the sale price. You will still need to pay stamp duty on that price and your parents will still have to pay capital gains on.
Can be done without having to 'pay' for it but you will still need pay what is due in relation to the tax outcome.
What you want isn't possible. But if your parent really wanna do this, similar alternative would be your parent getting mortgage on their own house and giving you the borrowed money to payout your loan.
Not sure if anyone would want to do this tho. I definitely wouldn't.
Nice try OP
Regards, Tax Revenue Office
Firstly, do you have enough earnings and/or assets to qualify for the mortgage (considering you're trying to increase your chances of purchasing a home, probably not)? The way I understand it, if you can't afford the mortgage, you can't be the sole owner on the paperwork.
Secondly, how do your parents feel about this? The house being in your name could affect future plans of theirs (Credit applications etc) as the asset would no longer be theirs. It will affect them even more if they are retired and on limited earnings.