Hello to all.
Is there a legal method of not paying stamp duty when one partner in a long term defacto relationship buys into the property of another.
Partner A
Owns investment property with sole name on title.
Tennanted out.
Bank value $340,000
Lower incomePartner B
Owns PPR with sole name on title.
Partner A and B reside here.
Bank value $430,000
Higher incomeMortgage over both for $279,000.
No negative gearing in place.Advice given to A and B to refinance to lower interest loans. Split the loans. Partner B buys into Partner A and claim tax breaks against income. Partner A uses money to pay off Partner B's property.
Partner A 's property is considered PPR by virtue of the ATO's 6 year ruling.but according to state laws no stamp duty exemption will apply on the aquiring of a stake by B into A's property.
Any advice would be greatly appreciated Cheers SteddiHi there
There is an exemption from stamp duty where a transfer of real estate is between de facto partners or former de facto partners where the breakdown of the relationship is the reason for the transfer. De facto partners are also eligible as "first home buyers" for a refund or exemption of stamp duty on the transfer of real estate (Duties Act). There are definately principal home exemptions for married parties.If you need particular advice, talk to your solicitor, but you may be able to limit the stamp duty payable given the consideration of "love" for the transfers occurring. My understanding is that stamp duty on IP's will be at ad valorem rates.
thanksI think you should just get married but beside that, why even bother to tempt the stamp duty demon? Leave things as they are unless there is some tax advantage in the deal. In the eyes of the law a de facto relationship is as good as any other contract and you are both in on these properties at the end of the day. However, if you do wish to tie everything up into both your names to make it all a little neater, when it comes to paying the stamp duty it will be levied at whatever the current market value is. This I know from my own past experience when I purchased my mother's property when she could no longer afford the mortgage repayments I hunted around to get the lowest valuation I could and that is what the stamp duty was levied at.
I wish you well.
Debbie
Thanks for the advice raddles and Debbie .I am having a close look at
the Renenue SA site and working my way through the Land Tax and Stamp
duty acts to get a clear picture of the details. Ther are a number of
exemptions applicable and finding the right oneis the key……………….ANY TAX LAWYERS OUT THERE ??????????????.Cheers Steddi
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