We are looking at purchasing a property owned by my partner's parents. They are willing to "sell" it to us for the outstanding mortgage amount, not its market value. The balance on the mortgage is at least $250,000 under its market value. Will our parents have to pay capital gains tax in the sale to us, even though we are the ones effectively being gifted $250k in equity?
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If the property is not CGT exempt (i.e under main residence exemption) then CGT is calculated on market value if sale is not an "arm lengths" transaction. See link.
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If the property is not CGT exempt (i.e under main residence exemption) then CGT is calculated on market value if sale is not an "arm lengths" transaction. See link.
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