SA CGT and Mortgage - Things to Consider During Transfer of Property?

Discussion in 'Property Law Forum' started by Shane Ploenges, 8 January 2019.

  1. Shane Ploenges

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    Hi, thanks in advance for any help.

    My wife and I are currently going through some stress in regards to the house we have lived in for over 12 years that belongs to her stepfather but was essentially bought for her.

    The situation is that about 15 years ago the house came up for sale next to my wife's fathers house at a price of around 75,000 or thereabouts, being she was unemployed at the time her stepfather got the mortgage for her under the understanding it was her house but not legally of course, as the mortgage is in his name. She was told she could do with it as she wished in terms of renovations etc, but he would not undertake normal duties of a landlord like repairs etc. The house would be left to her when he dies.

    Shortly after she met myself and we got married, i have been paying the mortgage for the last 12 years or so, as well as sinking probably about 35-40 thousand into renovations. Although her stepfather has also gifted us some money for renovations also, as well as her father, he does not in effect act as a landlord, as all renovations, repairs etc are handled by my wife and me.


    The trouble is he is about to turn 65 and receive the pension and is worried that owning the property as an asset will reduce his pension and he will also need to pay capital gains tax on it (I thought you only paid CGT if you sold?).

    He wants us to get a mortgage and buy the house from him but the problem with that from our perspective is that we have been paying the mortgage all these years and in fact it is nearly paid off in full, however if he sells to us it will be at market value which is now about 350,000 which means all those years we have paid are now lost, and we start all over with a 350,000 dollar mortgage, something at my age of nearly 50 i do not wish to do.

    My question is, can the current mortgage somehow be transferred to us and if so what are the tax and other implications to be aware of?

    What would be the best way to proceed in this situation without having to purchase the house at current market value and lose all the investment already made by us?

    Sorry for the wall of text but its a complicated matter, so thanks again for any help offered.
     
  2. Rod

    Rod Lawyer
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    See a lawyer :)

    You need to sit down with someone and go through the various facts, show paperwork, do property searches and then look at what is possible.
     
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