Get some legal advice before trying this. Some people want to help their elderly parent(s) purchase property. This might be the parents moving to a more suitable property or the parents becoming owners instead of renting. Helping the parents into a property can also help the children too, because they may potentially inherit the property at a later date and there can be great tax concessional along the way. There are basically 3 main ways an adult child could help a parent into a property: a. gift b. loan - at interest or interest free c. purchasing part of the property. There are various estate planning consequences to each of these and also practical consequences. Some things to consider: · if the parents own the home it might be 100% CGT and land tax exempt, if the child owns part it may not be completely exempt. · If one child made a gift and they have siblings and the parents die before they gift giver then the other siblings may also benefit from the gift. · if it was a gift and you died the next day after making the gift your family would potentially miss out · If it was an interest free loan and nothing done for 6 years it could become unenforceable · If they have incorporated a testamentary discretionary trust in their will and it the gift all came back to 'you' this could provide tax free income to your minor children for years to come. · If you gift it and parent A dies first parent B might remarry... An example of how It could work Bart and Lisa are adults with one parent left – Homer. Homer lost his house years ago and is renting. Bart and Lisa each have their own homes fully paid off and some cash in the offset accounts to their separately owned investment properties. Bart finds a property with development potential. It is just around the corner from where Homer lives in his rented flat. Bart is going to purchase the property and is deciding what entity to put it in when he has an idea. The property purchase price is $500,000. He has enough cash to pay for it so he could just buy it outright, but since his dad is not getting a main residence exemption for CGT Bart talks to Homer, his dad, and they decide to buy it in Homer’s name. Homer signs the contract and Bart lends him the 10% deposit with a promise to lend him the rest for settlement. Bart then realises that if Homer dies his sister Lisa will end up with half the property. So to make things fairer he talks to Lisa and gives her 2 options a) Lisa put in 50% of the purchase price at settlement, or b) Homer leaves the whole property to Bart and Lisa agrees not to challenge this if it happens. Bart and Lisa decide to ‘go 50/50’ and each lend Homer $250,000 and Homer settles on the property. It is a 5 year interest free loan which they intend to renew each 5 years. Bart arranges various approvals and the property is now worth $1mil when Homer dies 4 years later. Under the terms of the will of Homer 50% of his assets would go into each of 2 testamentary discretionary trusts with one controlled by Bart and one controlled by Lisa. They each now have 50% of an additional property which would be could be sold tax free or held onto with a cost base of $1mil. There has been no land tax along the way because this was Homer’s main residence and they have each gained further tax deductions by using cash in their offset accounts. Furthermore, any income generated from the property from that point could be streamed to their minor children, as beneficiaries of the trust, with each child getting around $20,000 without having to pay tax. Just before Homer’s death they also forgave the loans they made him – so this meant that an extra $500,000 was driven into the testamentary discretionary trust so they could generate even more tax free income.