You recently recommended to a couple that they invest a spare $100 a week into their mortgage, but all the studies I have done tell me that $100 a week into an investment property in the right location beats $100 week paid into your mortgage for long-term growth in wealth (also better than salary sacrifice to super). Interested to hear why you did not suggest that as an option given their incomes and equity position.

The problem is that many people have difficulty finding investment properties, and are often led astray by property spruikers who are making more than 60,000 cold calls a week in an effort to flog overpriced property. I certainly agree that a person with the skill to find an underpriced property, to which they can add value, can do well in property. The reality is that the majority don’t have those skills, and are far better off reducing their mortgage or investing in index funds.

At the end of 2018 we wish to sell our home to live with our daughter who will be purchasing her first home. We will have $300,000 from the sale and plan to gift her $250,000 towards her mortgage. Can you tell us how to go about this transition without any legal or financial issues. We are both on a Centrelink pension. We have no other savings - all we will have left is $50,000 from the sale. Will my daughter have to pay gift tax or should we buy into her mortgage?

Once you sell the property you will become non-homeowners and be able to have $583,500 in assessable assets before you are affected under the assets test. The $250,000 will count as a deprived asset for five years from the date of the gift but you are allowed to forgive $10,000 each year with a maximum of $30,000 over five years. While you'd be under the assets threshold for the pension, the deeming rules would put you over the income test threshold. This could result in the minimum reduction in your pension for the first couple of years but this should not make a massive change on your circumstances.

There is no gift tax in Australia, and I see no point in complicating things by taking a share in the mortgage unless you are trying to protect her from a future relationship breakdown. Another option may be to investigate granny flat rights, but in view of the relatively small amount of assets you have, I doubt if it would be worth it.