Parents often ask me how they can help their children into property.
Some even contemplate giving one of their existing properties to their children. For those more financially free, giving a property while they are still alive so they can see the joy it creates can be very heart-warming.
But there are a number of reasons why you should beware.
Firstly, the tax department will have its hand out for its share. On death, the passing of assets to the next generation is capital gains tax free and stamp duty free but pre-death both taxes are applied. The market value is used to calculate the taxes and you can’t simply say “zero” or as “a gift” to reduce the taxes.
For many, it would be nice to buy or transfer a property to your children but the difficulty is how to achieve it without taxes.
The other consideration is that on death will can be contested so the right people may not end up getting what you wanted.
So, here are three strategies to achieve the desired outcome of helping your children into property.
1. Deposit gift
2. Buying for a minor
3. Using a trust (which can create Legacy properties).
Helping your children into property is the dream of every parent, but you have to set up the right structures with a good property specialist (with tax experience) to ensure your gift is one that keeps on giving.
This article was originally posted by Geoerge Hadgelias on his LinkedIn account . George is the Principal of Ray White Real Estate Paddington in Brisbane. George began real estate fresh from five years teaching primary and early secondary school. After George’s first year in real estate as a salesperson, he partnered with the Ray White Group in business ownership before franchising.
Ray White Paddington has consistently featured in the Top 10 Ray White offices in Queensland and in that time has hosted two salespeople who have ranked #1 in Queensland for the group. Due to George’s outstanding leadership style, numerous team members have gone on to be business owners in their own right.