Another Report on Losing Federal Court Appeal, page-22

Clearly if a parent has sufficient spare capital to lend the deposit to the child and the child can borrow on a highly leverage bases then that is what you would probably do.

Where DomaCom may be of use is:

• A lot of Australians do not have the spare cash to give to their children as deposits
• It is widely reported that even with deposits, loan serviceability has become much harder to demonstrate with the result being that many cannot get loans
• Parents may not wish to “loan” the deposit to their children given the high divorce rate and risk having 50% go with their child’s ex-partner
• The family group only needs to acquire 25% of the equity of the DomaCom sub-fund to ensure security of tenancy. The child can then acquire further equity using DomaCom’s secondary market

Finally, as the headline of the post indicates, DomaCom is seeking to enable people to use the vast majority of Australians who do not have free non-super cash to use their super to co-invest into properties and to be able to rent the property. We are part way there with the sole purpose test(may be subject to appeal)  and we will work on the related trust issues on the next few months.

In the end, DomaCom is just an option for people who cannot otherwise purchase properties outright.