Can I gift a house to my spouse and avoid tax issues?

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PekesThistleSalty

New Member
Here is a head scratcher. My father-in-law owes $150k?on his house and it is valued at around $600k. He is on the pension and works a couple days a week to cover the other half. He is happy to gift the house to his daughter and we just have to pay the $150k. Is this even possible without the government or something stupid intervening? We would just let him live there until he leaves this earth. Has anyone else done something similar?
 
I am fairly sure you have to pay stamp duty because you will be doing a title change.

I think what you are better off doing is having your father in law gift the house to you in his will.

You live in the house and pay the remaining 150k off,!and your father in law lives there with you.

Then when he passes away, you get the house without any government taxes.

I think you then have only two years after inheriting the house to sell it; otherwise, if you sell it after two years, you need to pay capital gains tax.
 
Consider these points:

1. Most states charge stamp duty on marke t value, not the transferred value.

2. For asset testing, your FIL converts a non assessed asset (his home) into a deprived asset the $450k gift. That affects his asset test for 5 years and could impact his pension.

3. Have a solicitor draw up a life tenancy. This gives him security that you won't kick him out.

4. As someone else mentioned, there are CGT advantages to waiting until he passes away to inherit the asset.
 
There is a way.

If you have suficient equity in your home, you use that to pay the loan out, then transfer the home.

Ive had family do this.

So if his mortgage is 150K.

The Daughter wants to buy him out.

If she has the ability to pay his mortgage out, or refonance the 150K against her own home, then do a $0 sale on the home you want to transfer, there should be no stamp duty as the home to transfer has $0 value, on the sale.

You would neeed to check this with solicitor, but think thats how you do it.

I know if the daughter in law inherits the property after he passes, the value is sern as $0 for inheritance, so any mortgage either has to be paid out, or secured on another property.

So yeah, just double check with lswyers, but i belueve there us a way to do what you are wanting.
 
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