Hi, I’ve just read Steve’s new book and I’m really ready to just go and do it. I’m a bit confused though about how you can buy a property and then sell it to someone else on the day of your settlement (as someone did in the book). How do you manage to advertise the property and what are the legalities of this? Sorry if these seem like dumb questions.
Landt[blink]Hi Landt
You can advertise the property for sale once you have signed a contract on it. You can also show people through it before settlement by writing a condition in the contract that allows you to do this (usually after the contract becomes unconditional to the purchaser).If your solicitor knows it is being on-sold, he/she will usually just transfer the title straight on to the new buyer the same day you settled – much more straightforward than waiting for title to go into your name and then into the next buyer’s name.
You can ask your solicitor about this.
Cheers,
scotty3Last few months, The Government are really clamping down on this type of property transaction.
The tax office will now throw double stamp duty on any such transaction.(vic)
Check out your states new tax rules.
Live, Learn and GrowLifexperience
Hi,
thanks for your replies, especially helpful since I live in Melbourne.
LandtI nearly bought some land a few years ago that was onsold more than 10 times before settlement! (it was a new subdivision off the plan)
Terryw
Discover Home Loans
Mortgage Broker
[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
Hi, Whatis the benefit of the ‘on-selling’ ?
( why do people do it?) thanks, Inezprofit
Terryw
Discover Home Loans
Mortgage Broker
[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
You sign a contract to buy a property for say $100,000 and then before you settle (could be up to 90 days later). You find someone to buy it from you for say $125000.
You can charge this higher price if the property market is booming. If the value has actually increased.
If you have managed to get council approval to subdivide or similar in that period of time, you could also easily sell it for more
Live, Learn and GrowLifexperience
It means you can do deals without having to come up with the deposit and full closing costs. If you are smart with your offer, you can do these sorts of deals with No Money Down.
Live, Learn and GrowLifexperience
I am not sure the legality of the process. Firstly, dobule stamp duty if you do it according to the law. If you want to avoid the law, you can make any money you like such as not paying CGT. I do not know any lawyer would do such thing for you. I have also some questions about the examples in Steve’s book if you take into account the full tax or CGT. These people made NET $400000 without initial substantial capital. There is no doubt about the good things I learnt in the book.
Lawyers don’t pay your tax, …..you do…
Live, Learn and GrowLifexperience
Amused. Your not sure of the legality? Don’t worry, it is perfectly legal. Afterall, you are just onselling a house on the day you settle. You will pay stamp duty on your purchase and the new purchaser will also pay stamp duty. There are ways to avoid this legally, talk to your solicitor about this. You will have to pay tax, but this can be minised legally by using trusts etc.
Terryw
Discover Home Loans
Mortgage Broker
[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
Hi guys,
I failed to see the advantage of this process.
It would appear that under normal circumstances (eg. not using loopholes) stamp duty has to be paid. So that’s no advantage
It would also appear that you have to find a deal in the fuirst place that gives you extended settlement periods 60+ day to give you time for stritching up your deal. If you don’t find a buyer that sttles within your settelemnt period then you you still have to come up with the entire purchase amount. So that advantage is also out the door in that scenario.
So it would appear that a number of things have to go your way for this to work which looks like it makes it a little risky.
Anyway, I haven’t done it nor do i know anybody who has. Perhaps someone could tell there story how it actually was achieved.
Thanks
I’m with you Joe Cool
Inez
Of course, it is hard to do, but many people are doing this with stuff purchased off the plan. Property has gone up, so instead of settling, they just sell and take a profit.
Terryw
Discover Home Loans
Mortgage Broker
Click below to email meTerryw | 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
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