{"id":3735,"date":"2016-05-10T00:45:54","date_gmt":"2016-05-10T00:45:54","guid":{"rendered":"http:\/\/www.sydneyhomeshow.com.au\/?p=3735"},"modified":"2016-05-10T00:45:54","modified_gmt":"2016-05-10T00:45:54","slug":"handing-property-kids","status":"publish","type":"post","link":"https:\/\/homeshows.com.au\/perth\/blog\/handing-property-kids","title":{"rendered":"Handing property over to the kids"},"content":{"rendered":"<p>Parents who want to help their kids get on the real estate ladder may consider giving them an investment property or selling it to them at a special price. Let\u2019s look at how you can do this, assuming you no longer have a mortgage on the property.<\/p>\n<p>Your first step is to employ a conveyancer or solicitor to help you through the process and ensure it is all done correctly. It could be done as a simple transfer, although some experts say a contract for sale may offer greater protection. It\u2019s worth discussing the options with the conveyancer\/solicitor to decide the right approach. This will probably cost you about $1000-$2000.<\/p>\n<p>There may be tax implications associated with transferring property to a family member. For example, if you acquired the property on or after September 20, 1985, you may be hit with capital gains tax (CGT). Generally this will only apply if the property was an investment and not your principal place of residence (PPR). Mark Chapman, the director of tax communications at H&amp;R Block, warns that there are circumstances where the PPR may be restricted. \u201cTypically where part of the house has been used for an income-earning activity \u2013 for example, a room or two has been let to lodgers, the family member has run a business from home or maintained a home office for work \u2013 that might mean that some of the gain is taxable. If there have been lengthy periods of absence from the main residence, typically more than six years, that might also act to restrict the PPR.\u201d<\/p>\n<p>It\u2019s also important to note that the tax office will base the CGT calculation on the market value of the property at the time of the transfer, even if:<\/p>\n<ul>\n<li>You receive nothing in exchange for your property<\/li>\n<li>What you received was less than the market value of the property<\/li>\n<li>You and the new owner were not dealing with each other at arm\u2019s length in connection with the event (which means each party acts independently and neither party exercises influence or control over the other in connection with the transaction)<\/li>\n<\/ul>\n<p>To work out the market value, the ATO says you can either obtain a valuation from a professional valuer or do it yourself using reasonably objective and supportable data, such as the price paid for similar property that was sold at the same time in the same location. A professional valuation will cost\u00a0upwards of $300. Knowing how much CGT you will be up for might also influence your decision about whether or not you want to transfer the property.<\/p>\n<p>The other issue to consider is stamp duty, which will apply to most transfers. \u201cIn some cases, the transfer of property to family members is exempt, for example transfers to children by parents who are separating,\u201d says Chapman.<\/p>\n<p>Again, even if you gift the property or at give it away at a discounted price, the stamp duty will be calculated on the market value. \u201cIn NSW, for instance, the Office of State Revenue requires the parties to obtain a market valuation of the property for stamp duty purposes from a registered valuer, and stamp duty is paid on the value of the property being transferred as assessed by that valuer,\u201d he says. It\u2019s best to check with your state or territory office of state revenue to find out about any transfer fees.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Parents who want to help their kids get on the real estate ladder may consider giving them an investment property or selling it to them at a special price. Let\u2019s look at how you can do this, assuming you no longer have a mortgage on the property. Your first step is to employ a conveyancer [&hellip;]<\/p>\n","protected":false},"author":6,"featured_media":3736,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[114],"tags":[22,200,201],"class_list":["post-3735","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-property-sales","tag-home","tag-property","tag-real-estate"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.8 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Handing property over to the kids - Perth Home Show<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/homeshows.com.au\/perth\/blog\/handing-property-kids\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Handing property over to the kids - Perth Home Show\" \/>\n<meta property=\"og:description\" content=\"Parents who want to help their kids get on the real estate ladder may consider giving them an investment property or selling it to them at a special price. 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