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My father is retiring and would like to pass on the family home to my sister and me. We are both adults now and do not live in the home. I should also so mention, we are based in Sydney, Australia.

The house is paid for completely and there is nothing owing on it. I would prefer to rent it out instead of selling it as I believe it has room to increase in value over the years.

We are trying to figure out what the options are:

  1. Title change - this incurs a stamp duty tax at the current valuation.
  2. Gift deed - same as above, need to pay the taxman.
  3. Power of attorney - keep the property in my dad's name and be the power of attorney to manage it.
  4. Family trust - this is the one I am not as certain on even with my googling

I am wondering if a family trust is a good structure in this scenario, as I am sure it is a common one. Is it worth it, with all the complexity and costs?

I don't believe there will be capital gains tax to be paid as the house has been his main residence during the transfer. However, there will be capital gains tax based on the difference in valuations at the time of renting it out and when/if we sell it in the future.

Thanks.

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    How far do you live from the house? (You'd be the landlord, and maintaining, screening tenants, collecting rent, etc takes time and effort.) What does your sister want? Think strongly about KISS and either buy out your sister or sell it outright. – RonJohn Jan 22 at 0:39
  • I agree with @RonJohn Sell the house and split the money with your sister. Much simpler and less litigation prone. – Peter K. Jan 22 at 2:03
  • @RonJohn Thanks for the comment. We live about 30mins away from the house. I was thinking of getting a property agent to manage this, but I still need to do the numbers. KISS - Keep it simple stupid? She is happy to rent it out as well. Selling it is definitely an option. – Prabu Jan 22 at 2:10
  • Yes, that's KISS; I say it to myself all the time... She might be fine with it, but remember: don't mix family and money, especially when one is doing all the work. (Family-run businesses break that "rule" all the time, but it's still good to keep in mind.) If you do all the work, but she gets 50% of the profits, eventually you'll get bitter, so sign some form of contract where she acknowledges that you get a management fee, and she has zero say in who it's rented to. (Imagine her promising a cheap rent to her boyfriend the lazy bum, and then not demanding payment. – RonJohn Jan 22 at 2:21
  • CONT: or promising it to her best friend who's down on her luck. Or getting mad when you say "No!", and remind her of the contract, then stirring family discord.) So many possible problems... – RonJohn Jan 22 at 2:22

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