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My parents live overseas and have offered to help with my home loan. If they were to pay something like $1,000pm do I have any obligations or issues in regards to tax?
Responses
Hi Maxine
There is no tax issue as the money received from your parents is merely a gift and not your income.
Hope this helps.
Regards
Suresh Rajani
Hi Maxine,
Whilst it is OK for your parents to assist you with loan repayments, appreciate that your borrowing capacity will be assessed only on your income.
To increase that borrowing capacity by including the money from your parents, they would need to become joint owners with you.
This creates a whole lot of other issues, including Foreign Investment Review Board approval, prior to them being allowed to own property here.
Happy to review this with you if you would care to call.
Hi Maxine,
As Stephen has said, you can no longer have a guarantor or third party for the payments on your loan. If you need the assistance of your parents income, they must be on the title and on the loan. Depending on the income type and the country of origin, some lenders won’t accept foreign income for servicing of the loan.
What you could potentially do is have your parents gift you a lump sum to reduce the amount you borrow and then they are not on the title or the loan.
Happy to discuss further if you would like
Regards
Scott
Thanks Suresh
Suresh is on the money there.
One point to note - there may be a 'Please Explain' from ATO/related government agency regarding international funds hitting your account. Your accountant can generally assist with the query.
Don't get concerned if it comes through, and simply identify the funds coming from parents as a gift. They want to know it is not a source of income that should be taxed.