Steve has said in his book and at the seminar the other day that in the process of a flip there will be double stamp duties.
After the seminar I shared my flip experience with Steve, and here it is.You do not pay stamp duty when you flip. Stamp Duty on Transfer (the Biggie) is only payable on transfer of title. With a flip, the title does not pass to you but goes straight to the person you “assign” to
ie the new purchaser.My only outlay was my initial deposit ($500) which was recouped when flipped. I did not fulfill the finance condition, so there wa no binding obligation. The new purchaser gained finance approval and took over the contract. I simply stepped out of the equation.
There was no down side risk, but the capital gain was relatively small.
There you go.MOB
Hi MOB , it does differ from state to state, for instance here in SA u have to pay stamp duty on the deposit then the buyer pays stamp duty on the overall cost.
In Tassie they u have to pay stamp duty in full within 3 months or penalties occur, then again on the flip it must be payed in full.
Regards Bear
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I’m sure it does vary from state to state. I am in SA tho’.
There wasn’t any stamp duty.
CheersMy understanding is that one only has to pay stamp duty on the deposit payed and again on the flip by the new purchaser. Pay $100 deposit is a way around it with limited stamp duty. Of course my understanding could be wrong or outdated.
Regards Bear
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DONT MISS OUT!!!!!Nope, no stamp duty on deposit.
I was re-imbursed my deposit by the new purchaser. I provided my receipt as proof of deposit.
I did pay ~$85 for the conveyancer to handle my capital gain and post my cheque.Oh ok, cool, good to know , thanks for that.[biggrin]
Regards Bear
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DONT MISS OUT!!!!!Interesting idea.
Unfortunately, it doesn’t work in WA. There are anti-avoidance provisions in the Stamp Act. It’s quite illegal here.
Will be safer getting an option to buy the property, and selling it to someone else.
Cheers
EDIY Residential Property Settlements in WA – the book coming soon! When I can get my act together…
how does this work please – you sell the option to not take up your option?? couldn’t you get cut out of the deal?
I’m not to sure the difference between the states, however I know in Qld a real estate agent was sent to jail for doing a flip without paying stamp duty.
One thing to consider in this example; he was an agent, could have come under different laws etc.
Another thing to consider; you didn’t pay stamp duty, this time.
I’d check with another solicitor.However, very good, if it’s correct.
Picja is correct in Qld double stamp duty would certainly be payable.
A Call Option is certainly one way of avoiding the double duty (at least until the Option is exercised) however not always popular with Vendors.
Cheers Richard
richard at fhog.com.au
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Richard, if you make it a Put and Call Option I’ve found once the vendors understand it they are generally ok…..
Cheers
MelMel
We always use a put & call option but can’t say Qld Vendors totally understand it.
They seem to have more confort in a conditional Contract with all the out’s under the sun.
Don’t ask me why.Cheers Richard
richard at fhog.com.au
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