stamp duty clawback

B

byr02

Registered User
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Buying parents house current value 400k less my share of 60k = 340k

They want to fund and build a self contained extension to the side of existing house to live in.

I Currently live in an apt that I would like to keep and rent out.

Aware that there would be SD CD of approx 15k on my apt.

Only interested in doing this above board but
15k is a lot of money for me to hand over and would like peoples opinion
on how best to approach it or is it worth doing.

Is there any tax breaks I/parents could benefit from and therefore
take the edge of the 15k CD?

Cheers.
 
byr02 said:
Aware that there would be SD CD of approx 15k on my apt.
Click to expand...
Presumably you know that the clawback only applies if you buy a property as an owner occupier but then rent it out within 5 years of ownership? Thereafter the clawback no longer applies.
Only interested in doing this above board but
15k is a lot of money for me to hand over and would like peoples opinion
on how best to approach it or is it worth doing.
Click to expand...
What do you mean? Worth renting out and taking the SD hit? Worth paying the SD if it's due (you don't really have an option on this other than through illegal tax evasion)?
Is there any tax breaks I/parents could benefit from and therefore
take the edge of the 15k CD?
Click to expand...
Tax breaks for what precisely?
 
I have lived in the apt for less than 5 years and when I say worth
doing I mean that I havn't really got a spare 15k to hand over so should
I just try and sell apt and concentrate on house.

By tax breaks I am just throwing something out there to see if there are
any grants/tax breaks available to my parents or me in relation to the
self contained extension.
 
Well if you rent the property out you need to pay the SD clawback immediately so if you don't have that money... You also need to crunch some numbers and evaluate the viability and costs/benefits of keeping the property as an investment/rental property if you are considering this.
 
Well depending on how long before your 5 years is up it might be better not to let it out and live there till the 5 years is up. Crunch up the total rent expected from now till 5 years are up and if its not that much more than 15k you would be better staying put. Bear in mind that CGT is liable on the sale of the property if its let out as well.
 
Hi Bry02,

As you are buying from your parents you are entittled to consanguity relief, which you could call a tax break. Essentially you will end up paying half rate of stamp d on your parents house 3% instead of 6%.
 
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