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Investment or owner-occupier

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Newbie

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Hi, I am in the process of obtaining a home loan. I intend to buy this property for my parents but I will be living with them as long as possible because they do need care of others due to old age and health issues. They cannot offord to buy a house nor any lender approve their application as they are old. I am a first home buyer in QLD. My income is not enough to get a loan by myself so I was always under the impression that I can buy this property jointly with my sister who is married and lives in VIC. She is also a first home buyer and is ok with the fact that she will lose her concessions. The broker told me my share of the loan will be owner-occupier loan and as a first home buyer I will have the concessions but my sister's share of the loan will be an investment loan and she must pay half of the stamp duty and charge us rent. Another broker told me it is better to keep my sister out of this and apply for an investment loan by myself then charge my parents rent and bear all the tax implications of investment property. My parents and I have been living together and we share all costs of living such as food, bills, rent... I have been searching about these and I think I can rely on IT 2167 and just get an owner-occupier loan together with my sister. My question is:
Is tax office and lenders perspective are the same around domestic arrangements. In other word, am I correct in relying on this ruling and can I just apply for an owner-occupier loan with my sister?
I appreciate an expert advice. Thank you.
1 ACCEPTED SOLUTION

Accepted Solutions

Most helpful response

Community Moderator

Replies 0

Hi @Breeze,

 

 

Thanks for your question.

 

 

We would consider any money paid to you by your parents to be domestic arrangements not assessable income. It would be considered the same for your sister as long as she wasn't claiming any deductions regarding the property.

 

 

Your sisters half of the property would be considered an investment and when it is sold she may need to consider capital gains tax - if she is listed on the title.

 

 

As you would be living there, whatever portion you own would be considered your main residence and there would not be capital gains tax.

 

 

Thanks

 

 

KylieS

 

 

 

 

 

 

 

3 REPLIES 3

Devotee

Replies 2

Whose name/s would be on the title of the house?

Newbie

Replies 1

I was going to put my name and my parents name but I was told that only those on the loan must be on the title (lenders requirement apparently). So depending on the loan it would be either myself or myself + my sister.

Most helpful response

Community Moderator

Replies 0

Hi @Breeze,

 

 

Thanks for your question.

 

 

We would consider any money paid to you by your parents to be domestic arrangements not assessable income. It would be considered the same for your sister as long as she wasn't claiming any deductions regarding the property.

 

 

Your sisters half of the property would be considered an investment and when it is sold she may need to consider capital gains tax - if she is listed on the title.

 

 

As you would be living there, whatever portion you own would be considered your main residence and there would not be capital gains tax.

 

 

Thanks

 

 

KylieS