All Topics / Help Needed! / Might have to pay Stamp Duty twice??

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  • Profile photo of RobertRobert
    Participant
    @robert2533
    Join Date: 2016
    Post Count: 1

    Hi all,

    Hoping to find anyone with experience in a similar situation and/or related advice. Stressing at the moment!

    In the process of purchasing an investment property, my accountant said that I could put an offer in under a business/trust name and, once the offer was accepted, I could create the trust (as there was no point creating a business/trust if I didn’t get the property).
    I have now been informed that, because the trust/company did not exist at the time of the contract’s acceptance, I may be required to pay double stamp duty. I am now in a bit of a jam as, if I have to pay stamp duty twice, I will not have a large enough deposit and the bank will not service my loan. However, I have also been advised that if the loan is not serviced and if I make another offer/contract on the property, it will look like I am trying to dodge the extra stamp duty and may result in fines.

    So obviously I would still like to purchase this property and move forward in my plans. This feels like a lose-lose situation – as the banks, government and myself will get nothing if the loan isn’t serviced… But they probably don’t see it that way. I’m just finding it hard to believe that signing 3 days too early could cause such complicated dramas…

    Any advice or experiences you could share would be greatly appreciated. Surely I’m not the only person that has fallen into this?

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213

    A business is not something that can buy a property. You seem to be referring to a company – which is possibly going to act as trustee.

    This is something you need legal advice on, on the stamp duty act in the state in which the property is located. If NSW double duty could be avoided in many instances, but care is needed. A recent NSW case involving a trust resulted in double duty. Look at s18 Duties act.

    Banks don’t service loans, borrowers do. I think you mean not qualify for finance. If you make an offer on a property and cannot get finance, you will not be fined, but could lose your 10% deposit, and more.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

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