Do I buy the land from him and then he goes and buy his house?
I think you are maybe over complicating this.
Basically there are two separate transaction here
1) the sibling is going to buy a house for 70K
2) The OP is buying land for 70K (worth 120K)
The OP approaches the bank and says that he needs a mortgage of 70K to purchase land worth 120K (70/120 Loan to value ratio) In return for a loan of 70K the OP offers the land as full security and he also offers a full mortgage to be put on his siblings house. This should be sufficient security for the bank especially if the OP has sufficient earning capacity to service the loan.Once the 70K loan is obtained from the bank it is handed over to the sibling (as consideration for the land) who then purchases his house and the OP simultaneously takes ownership of the land.
There are two possible tax implications
1) The sibling may have a liability to capital gains tax. The gain is basically the difference between the value of the land on inheritance and the market value of the land now at the CGT rate of 33%
2) The OP may have a liability to gift tax (CAT) calculated as the difference between the market value of the land now and the purchase price ie the gift will be deemed to be 120-70=50 at a CAT rate of 33%
Any CAT tax payable in (2) can be offset against any CGT payable in (1)
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