Hi everybody!
A thought came to my mind when I was looking at a property next door to mine this morning. Let’s say I have a property worth $300k and another individual has a property for sale @ $400k. What would be the circumstances with finance/stamp duty/cgt etc (for the both of us) if we were to ‘trade’ properties with additional cash settlement from my end? i.e. We swap the properties and I pay the owner of the $400k property an extra $100k. Let’s say for this example the gross CGT on both properties is 20% from the time of purchase. Any ideas?Cheers
Hi Newgen,
What are you on?[biggrin]
As there is a change of ownership on the two titles I would suggest that normal CGT and stamp duty rules would apply.
Finances would need to be rearranged, where appropriate, as the lenders would require mortgage security over the property they financed which would need to have your name on the title papers.
Derek
[email protected]Property Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Derek!
Haha don’t worry, I was still waking up I think! [confused2] So with the swap, the two parties would write contracts on the written down cash value of each property? I was just wondering if they’d do that or write something in about the title transfer. So how would payment and settlement work assuming that both parties had finance? It’d be interesting to know what the figures would be like on each contract as well. This is all a bit complicated isn’t it [blink] [weird]so in theory you are gifting your property to the neighbour and buying his for $100.000..
mmm mmm you would need some good legal advice
maybe selling your property on a deffered payment
and paying $100000 with the balance in the same deffered time frame.
it would pay to find a solicitor who deals mainly in property.
I am also always looking for a good angle[eh]
If you dont ask you wont find out.[weird]
Didn’t one of those smart guys[smart] ask himself how and why the apple fell off the tree.
Me I wouldn’t have questioned it I would have just eaton it.[confused2]I would think it is exactly that same as selling yours and buying his – as that is what you are doing in essence.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Originally posted by Terryw:I would think it is exactly that same as selling yours and buying his – as that is what you are doing in essence.
Terryw
Discover Home Loans
North Sydney
[email protected]Yeah that’s kind of what would happen.. but it isn’t totally because the 300k from my property is just being transfered over, no cash transaction.. just got me wondering that’s all
The finance side of things has me puzzled now. Thanks for all the input so far everybody! [exhappy]Newgen, I think it would be two contracts for the purchase (one for each property).
For the financing of your ‘new’ house, you would ask your lender if your loan is portable, and would need to top it up, and transfer the mortgage from your current property to your new property, and you would ‘pay’ the seller the entire $400K on settlement.
I would assume a concurrent settlement, so you would give him $400K, he would give you $300K, and the banks and solicitors would work out all the nitty gritty. You wouldn’t worry about the other guy’s finance – just how yours will work out.
Cheers
Mel
The finance side of things has me puzzled now. Thanks for all the input so far everybody! [exhappy]
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