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Buying a property from my grandmother

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  • Buying a property from my grandmother

    Hi team, first time visitor, first time poster. Can someone help me please?

    TLDR: I want to buy Grandmas house from her. Publicly listed RV is 255K but the average price for the neighborhood is quite a bit higher - maybe mid 300's.

    Property needs some planning work done and the neighborhood is pretty average, but long term it'd be a good investment once those issues cleared up.

    I don't know if the RV is a recent rating, or if there is a property appraisal done on the place or anything, lets just stick with 255k.

    My taxation / income circumstances will just make this more confusing than it needs to be, so omitting those the first question is - can I offer 255k for this house and and have grandma sell it to me? Does it fall under the scrutiny of some sort of gifting laws etc? Is buying property like this legal in NZ?

    Thanks!

  • #2
    If you take out grandma (in the sense that you remove the associated person aspect of the transaction) and the review the process, what does it seem like, then?

    There is no longer any gift tax in NZ. Even on a deemed or implied gift, even though that is very unlikely to apply in the situation you've described.

    One possible scenario is that grandma dies and the executors come at you for 'pressuring' grandma to sell to you below market value, so de-valuing her estate and short-changing its beneficiaries.

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    • #3
      get registered valuation?

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      • #4
        A registered valuation is the fairest way.
        Any other grand children etc - how will they feel if you rip off Grandma?
        I'm not saying that you would but others may see it that way - great way to create family rifts.

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        • #5
          Disclosure to the family is vital here, seen too many go wrong. Registered Valuation sets the value and any 'discount' off of that should be made known. This stops infighting which can last for years. From a lending perspective we can usually get up to 80% of the RV, even if the lending exceeds the discounted purchase price (if o/occupied) 65% if standalone investment or 80% investment if tied to another o/occupied property. Hope that helps!
          www.ilender.co.nz
          Financial Paramedics

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          • #6
            I agree you need to make it clear to the family that you're buying it and get a valuation done. Don't underestimate the ability of your relatives to nurse a meaningless grudge.
            Free online Property Investment Course from iFindProperty, a residential investment property agency.

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            • #7
              you mention gifting?

              Is she receiving the cash? If she goes into care govt may look at this transaction as a way to avoid contribution for care?

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