Selling a house to buy a house.
Good day all,
Below post has been AI proof read,
My father is retirement age and owns two properties outright.
Property A is where he lives.
Property B is where I currently live.
Property B is worth roughly R3 million. My father is considering selling it and using the proceeds to buy me a property closer to my work for around R2 million. Ideally he would also have some cash left over from the transaction to supplement his retirement.
We’re trying to figure out the best way to structure this.
One idea is:
He sells the current property worth ~R3 million.
He buys a new property for me worth ~R2 million.
We enter into an agreement where I gradually pay him back for the new property over time.
Some questions:
Should the new property be in my name or his name?
If I repay him over time, should it be structured as a formal loan?
Are there tax implications, donation tax issues, capital gains tax considerations, or transfer duty issues we should be aware of?
How should we think about estate planning and inheritance implications if I have siblings?
Are there risks to either of us if the property remains in his name while I’m paying him back?
Is there a more efficient way to structure this arrangement that protects both of us and helps his retirement finances?
We’re planning to get professional legal and tax advice, but I’d appreciate hearing from anyone who has been through something similar or can point out issues we may not have considered. Additional note, we will be purchasing tax, and there would be no interest in the whole transaction where possible, besides for interest unavoidable, eg interest earned in the lawyers trust accounts etc