Hi everyone we are just looking at all different options at the moment and one option is purchasing our mother in law's property but didn't know what the process is without going through an agent when you purchase from family members and tax implications. We are hoping to hold on to it as IP for another 3-5 years and eventually make it PPOR. Thank you
Go to a solicitor and they'll arrange it, an agent will add nothing. The only way that I can think of to avoid stamp duty is to marry your mother in law and do a spouse transfer, but I'm not sure that you want to go down that road!
In its simplest form some consequences would be : - MIL loses her tax exempt and pension exempt asset but shouldn't have to pay tax on the proceeds ; - The cost base for the acquisition will be deemed to be the greater of market value or actual consideration for the contract price; - The buyer would pay stamp duty based on the market value - A valuation is required by OSR; - The buyers cost base would be the market value - Mum would have to likely consider income tax on earnings on the proceeds. Issues with gifting will affect her Centrelink position and perhaps aged care later. Worthwhile checking for the Centrelink implications for MIL before proceeding.
