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  1. #1

    Default Advice Needed Please. (Private Sale)

    Hi All,

    My Father is selling our homestead privately to Me. The value is under GV (Although there has never been an actual GV done, the bank has come back stating a value that needs to be on the Sales Agreement etc. This is fine. A Lawyer that me my mother and siblings have gone to see, has made up a Sales Purchase agreement to reflect this, with the remaining as gifted (Aprox 60k). The house needs alot of work done that could estimate to near 50k. (Its a early 1900s house) My siblings will also be given moneys as gift, so It looks I may be safe on the gifting side? I would like to hear your views on this.
    BUT!
    There is one clause that is part of this S & P agreement, is that my Father is allowed to live with me in the house until Death. I have no issue about this what so ever BUT on a legal side of things, can things get ugly with me and my siblings if he passes away? E.g. will they then have access to any shares of this Life Interest? Or anything?

    These is the term below:
    Life Interest Lease
    In consideration of Vendor Gift, the Purchase grants the Vendor a Life interest Lease in the property (Or any property purchased in replacement of the property) on the following terms:
    Term: Commencing on the settlement date and expiring on the death of the Vendor .
    Rental: Undisclosed for public forums.

  2. #2

    Default

    who gets the money from the sale now?

    what happens if he has to go into care? or his care becomes overwhelming to you?

    you need legal advice

  3. #3
    Join Date
    May 2007
    Location
    Hamilton
    Posts
    3,628

    Default

    Generally you would obtain a valuation and sale at valuation. Any gifting would be from this value. Also note how gifting will affect Rest Home Subsidies and there might be smarter ways of doing it.

    Be very careful with life interest, and I would seek legal advice.


    Why do you want to do this?
    - I'm guessing the rent is very low and well below market value, so your cashflow will be poor?
    - for tax, below market value rent to associated persons creates issues
    - does this property actually work for you?

    Ross
    More Profit from Property? TEACH ME MORE
    Ross Barnett - Coombe Smith Property Accountants
    Proud to give the best property advice for over 13 years.


 

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