Hi all just want to say this site is great and I was wondering if anyone could tell me about onselling ?
example … If I purchased a house that was due to settle in three months time say on 10th october and during this time I resold the house to settle on the same day would I still have to pay stamp duty?has anyone had any experience in this field?If you onsell a property you would have to pay stamp duty as well as the person you onsold the property to. The State revenue departments view is they always want a piece of the action. The only excemption would be if you transfered the property to a close relative, I mean brother wife mother or father.
Nigel Kibel
http://www.propertyknowhow.com.au
Australian and New Zealand Buyers advocate
service and seminarsNigel Kibel | Property Know How
http://propertyknowhow.com.au
Email Me | Phone MeWe have just launched a new website join our membership today
ok so does this mean if a property is transfered in name without money being exchanged that you dont have to pay duty?
You have to pay Stamp Duty on any transfer of land. I’m not sure what you mean by “transferred in name” but I assume you mean with no physical money changing hands.
Unfortunately, as this is a transfer from one party to another, stamp duty is payable on the value of the property i.e. fair market value not what you say it’s worth!!
This also applies if you transfer a property from, say your name, to a company owned by you. The Revenue Offices in each state always get a piece!
Regards
Megan
Dependant on which State you are in, one way around this in future deals would be to utilise an Call Option rather than go straight to Contract on the property.
Certain States are introducing Stamp Duty on Option Contract so check it out first.
Cheers Richard
[email protected]
http://www.yourstatefinance.comIP funding and US property finance
our specialityRichard Taylor | Australia's leading private lender
Megan I was referring to Nigels comment that if you transfer the property to a close relative there is an exemption.Richard would it be possible for you to tell me how the call option works? thankyou Hal
It is worth noting that if you transfer the name of the title to a company name that has you as one of the directors prior to exchange stamp duty is not applicable.
Hal
Not sure that Nigel’s comment is correct. It’s my understanding that any transfer (except under administration of an estate or family law orders) incurs stamp duty, regardless of whether it’s a close relative or not.
Even transferring between husband and wife incurs stamp duty (which is why you need to get your structures right from the outset).
Check with your accountant, however, if you have unusual circumstances.
Megan
thanx megan
Megan,
This differs in each state – I would recommend seeking professional advice.
Cheers,
Simon Macks
Residential and Commercial Finance Broker
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Hal
A Call Option is the “right but not the obligation to purchase a given property at a given price on a given date”.
Lets us assume that you see a property for $100,000 which you like but are not in a position to proceed to contract quiet yet.
You approach the Seller and ask him whether he would enter into a Call Option option with you. This option gives you the right but not the obligation to enter a Purchase Contract for $100,000 with say a 30 days settlement.
The option period is for 5 months and you offer to pay him $5000 on signing the option.
After a period of 5 months you have several choices:
1) You can agree to exercise your option and proceed to sign a 30 days cash contract on the property for $100K.
2) You can elect to forgoe your right to enter the contract and loose only your Option Fee of $5000.
3) You can nominate someone else (Subject of course to make these provisions within your Call Option) to enter into the Purchaser Contract. The other party will sign the Contract for $100K.It is likely that you will have sold this right for a minimum of $5000 as this merely equates to the Option Fee you have paid and does not cover an any element of profit.
Assume that you sell the Option for $25,000 and taking away the Option Fee you will come out with a profit of $20,000.
The nominated party who enters the Purchase Contract will be liable for the Stamp Duty payable on the purchase.
As mentioned in an earlier post Duty maybe payable on the Option Contract subject to which State you are in.
Cheers Richard
[email protected]
http://www.yourstatefinance.comIP funding and US property finance
our specialityRichard Taylor | Australia's leading private lender
You must be logged in to reply to this topic. If you don't have an account, you can register here.
