
Quoting
flyingron
You say you are taking out a mortgage? Does that mean that you are giving money to your father or you are just going to refinance a mortgage that is already in his name?
Generally, if he has equity in the property, he's usually ill-advised to just give it away while he is still living. The cost to transfer the house is minimal, but it's an irrevocable decision that has tax issues for the both of you. First off, if it is a sale rather than an outright gift, he will indeed be subject to capital gains tax (even if he has no equity in the house), though he might qualify for an exemption if he is using the house as a principal residence. If it is a gift, then he'll need to file a gift tax return, though no tax is probably owned. However, when you receive property as a gift, you take over his (presumably low) basis, which means you can get quite a tax wallop when you sell.
You need to explain why your father is doing this and what the motiviation is.