I have a question for the property & tax gurus on this forum.
A close friend of mine recently told me her parents were wanting to buy an investment property in her name to get access to the FHOG before it expires (we are in Victoria). She is currently at uni, lives with her parents, works casually 2 or 3 shifts per week and gets youth allowance.
She is a bit panicked because this is happening very quickly and she is nervous about the implications it will have on her own situation (youth allowance, ability to borrow in the future etc).
I am hoping somebody can fill me in on the implications for my friend. My current (limited) understand is:
- She will lose the youth allowance given it is means tested on assets (will this change if the property is highly geared with minimal equity?)
- She won't be able to get any FHOG in the future
- Depending on how much the parents borrow to fund the property, she may have trouble getting finance for her own property in the future
- She will not be able to claim the main residence CGT exemption on the property given it will be rented out straight away
- She will be liable if her parents don't make the mortgage payments thus credit history could suffer
- She will be legally liable for all taxes levied on the property (land tax, rates - have I missed any?)
If anybody can assist, that would be greatly appreciated. Really just hoping to understand the implications for her, not her parents.
A close friend of mine recently told me her parents were wanting to buy an investment property in her name to get access to the FHOG before it expires (we are in Victoria). She is currently at uni, lives with her parents, works casually 2 or 3 shifts per week and gets youth allowance.
She is a bit panicked because this is happening very quickly and she is nervous about the implications it will have on her own situation (youth allowance, ability to borrow in the future etc).
I am hoping somebody can fill me in on the implications for my friend. My current (limited) understand is:
- She will lose the youth allowance given it is means tested on assets (will this change if the property is highly geared with minimal equity?)
- She won't be able to get any FHOG in the future
- Depending on how much the parents borrow to fund the property, she may have trouble getting finance for her own property in the future
- She will not be able to claim the main residence CGT exemption on the property given it will be rented out straight away
- She will be liable if her parents don't make the mortgage payments thus credit history could suffer
- She will be legally liable for all taxes levied on the property (land tax, rates - have I missed any?)
If anybody can assist, that would be greatly appreciated. Really just hoping to understand the implications for her, not her parents.