Parents selling their PPOR to their children?

Hey guys.

My parents currently have a PPOR and a investment property.

What are the implications if i bought the PPOR off them? Will i still be able to get FHOG and stamp duty exemptions?

 

Also what would the likely implications for them be if they move from their PPOR into the investment property and make that their new PPOR.

 

its just treated as a normal sale to you. its got nothing to do with who you buy from, ie parents, friends or someone you don't know.

As for them moving into their IP, then that IP doesn't become tax deductible any more.

Their PPOR will not trigger a CGT event, however their IP may trigger a partial CGT evet should they decide to sell it down the track since it was a IP and PPOR during the ownership term.

I know there are some exceptions to that but you will need to speak to a accountant.. ie something if you make the IP a PPOR within 6 years of ownership its not subject to CGT.

 

How would they go about valuing their house and im guessing there is a way so they dont have to pay agent fees to sell to me.

 

the value is what the two of you decide. You could pay a valuer to come out and give you a valuation, but the best is probably to look whats selling around to get a idea on whats it worth.

You defiantly don't need to get a agent involved. Agents certainly aren't good at valuing property.

 

My parents want to give it cheap, but i guess if they sold me a 500k house for 200k the gov would get sus lolz.

 

What would i need to get done without using a agent? Obv i will get a lawyer but i guess they can draft both sides of the agreement.

 

You certainly don't need an agent for a private family sale. However, I would recommend you engage a conveyancer/solicitor to draw up a contract of sale on your parents behalf and also seek advice from your accountant on how to go about the transfer. The ATO will still hit your parents up for CGT regardless of how much they sell it to you for, as they calculate the capital gain on the "deemed disposal value". See your accountant or perhaps someone here like MattR can answer your questions more specifically.

 

Probably not in this current mortgagee sale enviroment

 

The gumbyment only wants their taxes and duties, to keep all the lights on and bar staff dutifully employed in those big parliament houses etc.

So they want the sale to happen at Fair Market Value, so they get a percentage of a nice fat transaction (not a dodgy family discount). You would get the Fair Market Value closer to what you want by enagaging a registered valuer which will cost you $500 or so. Explain to the valuer the situation and you want as low a price as possible so they can compare to the lower end sales and draw comparisons.

There's a bit about CGT on a family transfer here :
ATO ID 2005/216 - Capital gains tax: CGT event B1: right to use property before title passes but it sounds like as a PPOR for your parents there would be no CGT applicable anyway

There's another InvestEd thread on gifts to kids :
http://www.invested.com.au/4/taxation-gifting-property-money-your-children-9841/

Cheers
Carl

 

From the ATO site:
Transferring real estate to family or friends
and:
Selling your home

 

crc-error,
regarding the 6 year rule: the IP has to have been your PPOR before being made available for renting, and except possibly for a short changeover period, you can only have one PPOR at a time.

See ATO: Treating a dwelling as your main residence after you move out