Richard Goldsmith
Barely a day will go by without some new study or the release of some statistics about housing affordability – or rather unaffordability. Is it any wonder then that first-home buyers are looking for assistance from parents to provide a leg up into the property market.
It seems like a simple transaction, right? Write a cheque for the deposit, agree to provide a guarantee to avoid the need for mortgage insurance or, as a client of ours did, provide the vacant block for the newlyweds to build their dream home.
Unfortunately, things didn’t work out for the newlyweds and so they had turned their minds to the division of property. Fortunately for our client, they have a clear interest in the property; they remained on title and have incurred land tax over the years on account of their interest. It could have ended much worse for them.
If you are planning to assist a child to buy a property, you must consider that there is a significant risk that their spouse or, if they are in business, a third-party creditor might make a claim on the asset that you have funded. Self-evidently it becomes important that the transaction be documented.
If you have any questions about how to mitigate against the risks faced in lending money to your children for a property purchase, you can call us on 5975 7588 or visit our website at www.carrollgoldsmith.com.au to arrange a free 30-minute appointment with Richard.
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