Have you purchased or sold a house in the past with either the assistance of a family member or assisting a family member?
The extension of the Brightline Test last year from 5 years to 10 years has resulted in families having to pay tax unexpectedly where parents have assisted their children with purchasing a home and their equity share had been sold, or the property sold.
The Brightline Tests means when parents purchase an equity share in a separate home to their primary residence, any gains made may be taxable if their share is sold within 10 years (previously 5 years) for a gain. There are alternative ways to assist family members into purchasing homes such as a loan, but this may not satisfy your banks’ lending criteria.
If you are looking to assist a family member into home ownership it may be beneficial to spend some time looking at your options. Please contact us to discuss.