My Mothers home to rent but how?

Discussion in 'Property Management' started by P j T, 3rd Jul, 2017.

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  1. P j T

    P j T Well-Known Member

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    Hi Terry,
    thanks for this information. What is the 6 year rule please?
    This house has been held by parents now for about 65 years.
    If we could rent out this home, mum can comfortably pay bond and maintain rent on a smaller home for some time. The rental income would support her because we suspect that if the house was rented for income she would lose her pension.

    Peter T
     
    P j T, 11th Jul, 2017
    #21
  2. Marg4000

    Marg4000 Well-Known Member

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    Friend was in a similar situation.

    Property in joint names, husband had dementia and admitted to care. She planned to sell the family house (using an EPOA for her husbands share) and buy a unit for herself to live in.

    Fortunately she took legal advice first, and was told that half of the proceeds of the house sale belonged to her husband and would have to be invested to subsidise his care. Selling using the POA meant she was legally obliged to put that person's interests first. The half share she would receive was insufficient to buy anything.

    So she chose the sensible alternative to stay in the house.

    So if you plan to sell, make very sure you get good legal advice before proceeding, as every instance can be different.
    Marg
     
    Marg4000, 11th Jul, 2017
    #22
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  3. wylie

    wylie Moderator Staff Member

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    Also, I don't know if it is still the case, but when my FIL passed away, my husband went with his mother to Centrelink. They gave very decent advice, and helped her to retain as much pension as possible. I recall at the time thinking it was a strange place to get financial advice from, but they were very helpful because they know their own system and rules.

    Perhaps it is worth a trip to one of their advisers, even as a "check" to other advice you might receive about the issues involved with losing pension etc.
     
    wylie, 11th Jul, 2017
    #23
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  4. legallyblonde

    legallyblonde Well-Known Member

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    What Wylie said... call the are pension team and ask to speak to Financial Information Services (FIS) before you make any decisions.

    If it was my mum... I would arrange for a number of the children to move into the house. This is because income received from immediate family for board etc is not assessable income in the eyes of Centrelink. I believe the rules are the same for the ATO? This means she could end up with plenty of extra money in her pocket and no impact to her pension full stop as others have mentioned moving out of the house or selling the house means that it will probably become an assessable asset under the asset test
     
    legallyblonde, 11th Jul, 2017
    #24
  5. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    6 year absence rule for CGT. If it has been held for 65 years then it would be CGT, unless there was a transfer from your dad to your mum for example.
     
    Terry_w, 11th Jul, 2017
    #25
  6. P j T

    P j T Well-Known Member

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    Dad goes into respite care today after being in Concord Hospital for a month.
     
    P j T, 18th Jul, 2017
    #26
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  7. Angel

    Angel Well-Known Member

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    @Terry, do you mean that as the Family home it is CGT free ?
     
    Angel, 18th Jul, 2017
    #27
  8. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    Yes probably is CGT exempt
     
    Terry_w, 18th Jul, 2017
    #28
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