gifting

Neil (aged 66), lives in his home on the NSW South Coast. He has lived there for over 30 years and
inherited the property from his father. It is an acreage property. The zoning on the property was
rural, with the council changing it over the years. Currently the quarter of the property around the
house is zoned residential. A third of the property is zoned light industrial with the balance of the
zoned environmental protection.

There is a regular mortgage of approximately $300K to over the property.  Neil is currently working
occasionally as a consultant. But this work and receipt of payment has been sporadic since Covid. He
did over $15,000 of work in May but is yet to be paid. As a result, his mortgage shows a month in
arrears. He also has some arrears on his rates which he is paying off. He wants to take a Reverse
Mortgage to pay off his mortgage so that in future he will not be so affected by late payments and
sporadic work.

He is also looking to gift his son $100,000 to help him purchase a property. As his property is valuable
with multiple zonings he does not receive any Centrelink pension so the gifting will not effect any
pension. Other funds will be used to undertake property maintenance and fund travel. By removing
the need to make monthly loan repayments Neil will be able to live his life comfortably and stay in
his property for years to come.

Whilst he is planning on gifting funds to is son, he expects to be able to leave an inheritance to his
family despite the Reverse Mortgage, and he can later sell the property if he needs to pay for aged
care. The loan is not to top up his income but will reduce his outgoing payments so he can live
comfortably on his income. Neil intends on making payments as his work permits, but this Reverse
Mortgage has allowed him the freedom of not stressing about regularly making repayments.

(Names, locations, amounts, & other personal details have been changed to protect the client’s
identity.)