Buying OO property with my daughter

Thanks Y-man

 

It is just borrowing money!
using the property as security

But best to get some advice before proceeding

 

Better to obtain some advice from property experienced solicitor.
Please remember it is irrelevant where the loan is obtained from, but rather what the loan is used for that matters. If you will use the funds for OO you cannot claim any deductions, it is not used for investment. You need someone to look at your overall situation see what you wish to achieve and provide possible solutions instead.

 

This may help

Legal Tip 12: Parents Helping Adult Children https://propertychat.com.au/community/threads/legal-tipe-12-parents-helping-adult-children.736/

 

You can use the equity from the existing property but do not cross securitise the properties. Draw upon the equity from the existing property and ensure that the loan is a seperate loan and not a top up. You can then ascertain a seperate loan (with the same or different lender) against the new property purchase.

The one issue associated with purchasing with your daughter is that her borrowing capacity may be limited/impacted in the future. Most lenders will take the full liability into their servicing calculations. There are lenders like CBA, St George, etc that will take half of the liability provided that you can show that the other party can service their portion of the debt.

 

Best to speak to a broker rather than direct to bank, you're at risk of ending up in a structure that's not ideal and a "the bank told us this was the ONLY way we could do it" type scenario. Need to plan ahead not just for the right now.

 

Assuming you don’t have other children or relationships with other parties that may be envious of your plans to move in with daughter I still don’t like this idea as emotionally it ties you together.

Your job as a parent is to let your children fly away, and wave goodbye knowing they will only come back occasionally for dinner hugs and advice! That is a job well done. AN adult child should not be living with a parent unless there’s some disability etc. and child has put aside their life to care for other or VV

Anyway that’s just my opinion

It’s not good for her in any way

A much better idea is - for her to get a normal small studio or unit for her independence and you can gift some deposit...or go guarantor if she’s not bank approved

My parents have many kids and they did one or both for us. With happy outcomes

 

Look at it objectively. This is a single person in their 20s on more than double the average income. Why should she have trouble affording a property?

 

If you do go on title the way to do it might be as trustee for the daughter. That way you can come off title later without triggering CGT or stamp duty and the daughter could get the full main residence exemption.

 

Thank Shahin. Yes I will check that with my broker.

 

Yes I can see your point here.
We did discuss those things. Looking on circumstance, after coming from QLD living on her own for last 7-8 years. We both might live together for a little while and then depending on her job, she might need to move to different place. She won’t be buying soon at any other place. So that’s the way thought to get her in the property market which would suit both of us. Then when it comes to get her own property we can sell this place down the track and hopefully we make some equity on it so we both can go in our own directions.
I have my house In regional NSW so depending on the situation I can sell that or I can live in it.

Hopefully we are thinking on the right lines. That’s why I really do appreciate different point of views.

 

Thanks Terry. It’s a great read.
I also want to make sure that I don’t loose my money if any future complications arise.
That’s why I am thinking to go on loan with her and that way I will have my share on the title if t comes to sell it one day. Hopefully that will keep our good relations too.

 

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And in NSW (at least) the First Home Buyer Assistance Scheme rules allow a "ineligible parent" to be a co-owner and not taint the assistance entitlement.

Buying with others who aren’t eligible
The FHABS applies when 50% or more of buyers are eligible.

• If you’re buying a home with others who aren’t eligible, you can still apply for the scheme if you and any other eligible buyers are purchasing at least half of the property. This is called a shared equity arrangement.
• Shared equity doesn’t apply if your spouse is one of the ineligible buyers.