My mother recently bought a house outright (cash buyer), the title is solely in her name. I Lent her 1/3 of the purchase price. Instead of me going on the property title, we drew up a loan agreement stating that I had lent her 1/3 of the purchase price as an interest-free loan, and I will receive 1/3 of the sale price of the house when eventually it is sold (probably as part of her estate after she dies). The agreement also states that I have rights to occupy/rent out a portion of the property until it is sold.
My question is, when the house is sold and I receive 1/3 of the sale price, will I be required to pay tax on the profit? I.e. would this be considered a taxable capital gain on an investment?
And given this would be proceeds of the loan agreement and not an inheritance/technically not my PPR, would I be correct in assuming there is no inheritance/PPR-related tax exemption?
154 views
1 replies