General Information on Acquiring Property for Children

Although the property investment market is not very active at the moment there are parents now looking for a bargain and buying property for their children. With the benefit of decreasing property prices many parents are considering buying a property now rather than waiting for children to get older and then provide them with cash lump sums to make a property purchase.

The main benefits of buying now are (1) the prospect of future capital appreciation and (2) the hope that loan repayments if a loan is involved will be covered by rents from the property. However obtaining loan finance for property investment is quite difficult at the moment.

In separate posts, we will examine the most common strategies for parents who buy now for their children and look at the estimated outcome of the different alternatives.

The most common methods for parents to purchase a property are:

In each of the above situations, the following items need to be considered when dealing with the property:

  • Financing the acquisition
  • Income Tax on rental income from the property
  • Capital Gains Tax, Gift/ Inheritance Tax and Stamp Duty on any sale or transfer of the property or interest to a child.