Should we look at paying rent for our child in a shared unit/house or is it worth our while buying a unit paying his half of the rent using a principle only loan?

Q.

We live in regional Queensland and our son intends to study at uni in Brisbane - a four year course. We own our own home and would like to know what would be the best strategy for us with regards to accommodation in Brisbane. Should we look at paying rent for him in a shared unit/house or is it worth our while buying a two bedroom unit close to uni and paying his half of the rent using a principle only loan?

I believe property should be purchased on its merits and not simply because you are trying to provide accommodation for a family member. However, if you can find a bargain priced unit you could talk to your bank and go guarantor so that your son could buy the unit in his own name. He would then become eligible for the first home owners grant and reduced stamp duty if applicable. This would prevent a CGT liability if you bought the unit with him as a joint owner and then wanted to transfer your share to him in the future.