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Many years ago, when my son's kids were little, I purchased a house for them to live in. It was important that the grandchildren had a stable home of their own, for them to grow up in.

I paid the Capital Gains Tax when they could afford to get a loan to buy the house. They lost their previous home when the Keating Govt had interest rates at 17%, Suncorp adding on another 4% because they were overseas and bank's view that it was a "rental property".

They had to pay Stamp Duty to move in.

Gifting also came into the equation, from a Pension point of view.

Little kids are no in their 30's, and looking back it was the right thing to do.

However - if I'd have gone up to South East Asia, living a wild and spending lifestyle - I'd have returned home, and the government would have said "Well done, good and wise servant, you are to receive full Pension entitlements", as gifting rules would not have applied.

So my comment is to this couple - from where I sit now, the money was well spent to get my son and family into their own home, when it was needed, rather than have them wait for years until my passing, when the need would not have been there.

As Paul said, the present arrangement protects your daughter from losing the property to an unscrupulous person, who would move in for 12 months and then leave with 50% of the property value in his pocket.

Again as Paul said, get good Financial Advice, with Lawyer type clauses that protect your and her interests.

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