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:
- Title change - this incurs a stamp duty tax at the current valuation.
- Gift deed - same as above, need to pay the taxman.
- Power of attorney - keep the property in my dad's name and be the power of attorney to manage it.
- 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.