Property question

[MrsMummaButterfly]

Lovely knowledgable ladies on bub hun, just needing some advice as i have no clue on this.

My family own 3 investment properties, ill call them A, B & C.

In total the loan for these 3 properties combined is $1 million.

If A and B sells at $400,000 each then the total loan left over is $200,000.

My hubby and I may look into living in property C which is valued at around $400,000.

We aren't sure if its best if we take over the mortgage repayments on $200,000 which will still be under my families names.

Or

Should we purchase the property and if this is the case, how is it treated from a tax and bank perspective, for example, do we just apply for a loan for the $200,000 and then pay that to my family, even though the house is valued more than double the amount remaining?

Thanks in advance ladies :-)

[Elijahs Mum]

If you take over the mortgage the home will still be in other people's names so you won't technically own it and I think it's better to get their names off in case of any drama down the track!
If you buy them out ( pay off the mortgage plus their share of its value) then you will still be up for stamp duty of the value of the home but then obviously it's yours and any capital growth over the years you won't have to share - as far as the bank is concerned you can buy any home for any amount, they will just do their own valuations ( I've had clients sell houses to family for $1 but you have to pay stamp duty on the actual value of the home )

[MrsMummaButterfly]

If you take over the mortgage the home will still be in other people's names so you won't technically own it and I think it's better to get their names off in case of any drama down the track!
If you buy them out ( pay off the mortgage plus their share of its value) then you will still be up for stamp duty of the value of the home but then obviously it's yours and any capital growth over the years you won't have to share - as far as the bank is concerned you can buy any home for any amount, they will just do their own valuations ( I've had clients sell houses to family for $1 but you have to pay stamp duty on the actual value of the home )

Thanks heaps @Elijahs Mum
We would only be paying the amount left on the loan, what do you mean by 'plus their share of its value'

[Elijahs Mum]

If it's worth more than what you all paid for it , less what's owing, then they have technically made money on it so you would pay them their share of any profit ( so if they bought it for say $300k and it's now worth $400k if you all sold it now you would all share in the $100k profit , so if there are say 4 family members each gets $25,000 - if that makes sense!) but if they are happy just to clear the debt then that's great for you!

[MrsMummaButterfly]

If it's worth more than what you all paid for it , less what's owing, then they have technically made money on it so you would pay them their share of any profit ( so if they bought it for say $300k and it's now worth $400k if you all sold it now you would all share in the $100k profit , so if there are say 4 family members each gets $25,000 - if that makes sense!) but if they are happy just to clear the debt then that's great for you!

That makes perfect sense. Thanks so much lovely lady, can always count on you to know these things :-)

[monnie24]

If you take over the mortgage the home will still be in other people's names so you won't technically own it and I think it's better to get their names off in case of any drama down the track!
If you buy them out ( pay off the mortgage plus their share of its value) then you will still be up for stamp duty of the value of the home but then obviously it's yours and any capital growth over the years you won't have to share - as far as the bank is concerned you can buy any home for any amount, they will just do their own valuations ( I've had clients sell houses to family for $1 but you have to pay stamp duty on the actual value of the home )

How does this work if the person still has existing mortgage??

[monnie24]

.

[Elijahs Mum]

How does this work if the person still has existing mortgage??

The bank won't transfer the title unless the mortgage is paid out - so if there is $200k owing you can't sell it for $1 , the only time a bank will take less than what it is owed is if it is a bankruptcy or they have taken possession and then they will usually take the highest bid at auction

[monnie24]

The bank won't transfer the title unless the mortgage is paid out - so if there is $200k owing you can't sell it for $1 , the only time a bank will take less than what it is owed is if it is a bankruptcy or they have taken possession and then they will usually take the highest bid at auction

Thank u that's what I thought.

Having similar situation with properties so many hard decisions ARGH!

[babybeeno1]

If multiple family members have bought I would assume it is set up as a trust account. When you sell you need to also take into account agent selling fee's for each property and capital gains tax aswell. As for the final property you can buy them out but your names would have to be on the original mortgage if this is the case you don't have to pay stamp duty on a property you already own a share in but your mortgage will be higher than what is currently left owing to the bank