My parents overseas might be willing to pay half the cost of a house since they will occasionally stay over. My wife is Japanese and qualifies for a home loan.
If my wife and I put up 50% of the house price via loan; and my parents put up the other 50% via cash from overseas, is this possible?
Will ownership be split 50/50 on the title of the house? I’ve asked a few realtors and all of them say they don’t have experience with it. Is there a particular company that specializes in this sort of thing?
Also, is it possible if we already own land, to split purely the cost of building a new house 50/50? Since we’d already own the land, how does the split look then (for legal purposes, my parents want to just gift the money but I am under the impression that would incur taxes).
by _crossroads_
7 comments
If they actually owned 50% of the property/house then probably doable. If however that ownership was in name only you could be liable for gift tax.
If they were gifting you the money, you would qualify for the [exception ](https://souzoku.asahi.com/article/14333437)for house purchases.
I’m no expert but it might be difficult to own a 50% share of a house in Japan with your overseas parents. You’re probably better off having the house in your own name outright and your parents gifting you the money. But you would have to declare the money for tax purposes as it likely to be above the threshold. If possible your parents could get you a fixed amount towards the mortgage every year so it is below that.
If you hold Table 1 visa and have not lived in Japan for 10 consecutive years yet, your parents could gift you the money without you incurring any gift tax liability.
What about getting a loan from your parents with the money? Or would that be subject to gift tax too?
>If my wife and I put up 50% of the house price via loan; and my parents put up the other 50% via cash from overseas, is this possible?
Yes. But if your parents take a 50% ownership share of the property, it may be difficult to convince a lender to provide you with a loan, because the lender won’t be able to sell the property (in the event of default) if there is a co-owner (your parents). It’s possible this could be solved by making your parents guarantors on the loan, but I suspect most lenders would shy away from non-resident guarantors.
If your parents don’t take a 50% ownership share of the property, you would be facing a gift tax liability. As discussed elsewhere, there is a 5-10 million yen gift tax exemption for housing acquisition funds in certain cases, but it appears that the gift you are contemplating receiving would be much larger than that.
>is it possible if we already own land, to split purely the cost of building a new house 50/50?
Yes, it is possible for the ownership of the land to be different to the ownership of the building. This is actually a fairly common arrangement. But even if your parents only help with the cost of the building, you will still have the same problems described above: gift tax if they don’t take ownership and difficulty finding a lender if they do take ownership.
The old trust fund baby
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