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Re: Property purchase sponsored by parents

Initiate

Views 1136

Replies 6

Good Afternoon Smiley Happy

 

I am an Australian citizen and tax paying employee living in Melbourne. My parents will be gifiting me with $200k AUD for a property purchase from outside of Asutralia. Would that money be subject to tax once in my account ? 

 

Cheers

1 ACCEPTED SOLUTION

Accepted Solutions

Most helpful response

Devotee

Replies 5

Lucky you! No, one off gifts are not taxable. However, any bank interest you earn from it once it hits your account is taxable and needs to be declared.
6 REPLIES 6

Most helpful response

Devotee

Replies 5

Lucky you! No, one off gifts are not taxable. However, any bank interest you earn from it once it hits your account is taxable and needs to be declared.

Initiate

Replies 4

Thank you for the reply Smiley Happy 

 

I have another question on the method of transferring money, just wondering if you or anyone else has heard of or experienced this situation. My dad came to Asutralia as a tourist in 2015 and opened an account at Commbank with my Australian address.In the past 5 years he has sent a few thousands to his account from overseas using exchange services, and occasioanlly has transferred small amounts of money to my Commbank account. Now he'd like to send the property upfront gift gradually within the next 6 to 12 months to his account first then trasnfer to my account whenever an appropriate property is found. The question would be, wouldn't the surge of deposite within a 6 months period alarm the bank of suspicious/fradulant activities and might put hold or request to close account which will introduce a mountain of problems ? 

Devotee

Replies 3

Quite possibly... but that is not a tax or ATO related question and I doubt you will get a reliable answer here.

Initiate

Replies 2

So I called ATO, explained the situation that my parents are going to send the money gradually within 6 months, possibly in 20 transactions and the perosn on the phone told me as long as it is a gift and you are not paying your parents anything, it's all good, the money is not subject to tax. Then later I chatted with one of the agents online (where you can chat in step 3 of the tax lodgement) they said because it's going to be more than 1 transaction, it is considered recurring and anything after first transaction would be subject to tax. 

Surely this is not the first time parents are sending money to buy property but I cannot find any info regarding this specific matter on ATO website, there is no explanation around parents sending money to sposnsor any aspect of their children's life here in Australia, let alone property purchase. As if the law doesn't accept nor deny that the money received from parents (so long gift) is not subject to tax. This is a really simple situation, people build up saving bit by bit as everybody does here in Australia prior to buying a property. The only difference here is, instead of saving money in my parents account back home, they are sending it to my account so that it actually helps build up my account portfolio inorder to buy a property. 

Does anyone have seen any info regarding this matter on ATO wesbite ? 

I would appreciate your help Smiley Happy

Devotee

Replies 1

@Ali2020it will look like income fom what you have described. I would have records of it coming from your parents account to yours. Gifts do not attract tax  put normally they are paid in a bulk amount which does not resemble income. Be prepared to be flagged in a future audit. If they can - ensure your parents mark the transfers as gifts in the notes on the bank transfers.

 

As long as you can prove its a gift there is no problem.

Initiate

Replies 0

Thank you for your reply Smiley Happy

 

just out of curiosity, are there caps on the amount of gift ?