Forums / Getting Technical / Legal & Accounting / Adding family member to a title

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  • Profile photo of goldiesgoldies
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    @goldies
    Join Date: 2010
    Post Count: 115

    Hi,

    I was wondering, can i add a family member to a house after i have purchased it? If so, what are the costs and what do i need to do?

    I am not putting the family member on the loan docs but want them as a 50% owner.

    Thanks.

    Profile photo of Scott No MatesScott No Mates
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    @scott-no-mates
    Join Date: 2005
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    spouse, parents or kids?

    Some states allow you to put your partner on title gratis but others may have to pay stamp duty & trigger a cgt event for you.

    Profile photo of goldiesgoldies
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    @goldies
    Join Date: 2010
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    ITS A SIBLING AND I AM IN NSW….

    Profile photo of MarJacMarJac
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    @marjac
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    goldies wrote:
    Hi,

    I am not putting the family member on the loan docs but want them as a 50% owner.

    Thanks.

    As said depends on which State but usually fairly easy, often known as a 'Love a Affection' Transfer, see a solicitor who will be able to advise fully

    However also check with your lender, if the new joint proprietor will not be also become a borrower they will have to Guarantee your loan. 
    Some lenders (if not most) may not like this situation especially if the family member is a dependant (i.e. not working) and or not living in the property (i.e. not gaining a direct benefit)

    Profile photo of TerrywTerryw
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    @terryw
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    As far as I know there are no concessions in any state for added a non spouse to title. There are exemption for adding a spouse to title for own occuped property, but usually not for investment properties – except for VIC.

    You need to consider CGT implications as well as the stamp duty. Generally there wouldn't be any CGT concessions unless it is done as part of a family law settlement.

    Sorry, i just seen you post above. There are no exemptions for stamp duty for siblings in NSW. So you will be up for the stamp duty on the value of the portion transferred.

    Terryw | Structuring Lawyers / Loan Structuring Pty Ltd
    http://propertytaxbook.com.au/
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    Lawyer, Mortgage Broker and Tax Advisor (Operating Remotely) www.terryw.com.au

    Profile photo of goldiesgoldies
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    @goldies
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    Profile photo of IntrigueIntrigue
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    @intrigue
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    Hello Terry,

    I was wondering about the situation whereby an elderly relative wants to leave their PPOR to a family meber.
    I have read on here before advice about this – something along the lines of the transfer of ownership post death would incurr stamp duty and tax however the elderly can gift a certain percentage each year pre death avoiding this?

    Profile photo of TerrywTerryw
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    @terryw
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    hi Intrigue

    A PPOR can generally be passed to a beneficairy without tax or stamp duty under a will. It remains tax free for 2 years and then would be subject to CGT if they were to rent it out or may be exempt if it were to become their PPOR.

    Not sure about the gifting a portion each year. Maybe you are referring to the centrelink rules where someone on a pension can give away a certain amount of money each year and still be able to get the full pension. If they were gifitng part of a house there would be stamp duty involved and conveyancing costs. These wouldn't make it worthwhile doing I think.

    Also look at getting your relatives a testamentary trust in their will as these can have significant tax and asset protection advantages where the property will be a rental.

    Terryw | Structuring Lawyers / Loan Structuring Pty Ltd
    http://propertytaxbook.com.au/
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    Lawyer, Mortgage Broker and Tax Advisor (Operating Remotely) www.terryw.com.au

    Profile photo of IntrigueIntrigue
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    @intrigue
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    thanks Terry I will have a talk with the members involved and see what they think the future use may be.

    I am guessing the benificery will reside in it as PPOR for a few years and then likely sell. In this situation would it be correct to say that no tax would be payable?

    If it were suggested that the home be rented would it be a good idea to value the house at the passing so that any CGT is calculated based on the value at the time of acquision and sale rather than the value that the home was orifinal purchased for by the deceased?

    Thanks for you help.. much appreciated.

    I will have to look up the trust structure you refer to as it sounds like you speaking a foreign language to me at present.

    Profile photo of TerrywTerryw
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    @terryw
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    If someone passes their main residence to a beneficiary under their will then sell it within 2 years it will generally be exempt from CGT.
    s118.195
    http://www.austlii.edu.au/au/legis/cth/consol_act/itaa1997240/s118.195.html

    If it is not the main residence of the deceased or the beneficiary then s118.200 will apply
    http://www.austlii.edu.au/au/legis/cth/consol_act/itaa1997240/s118.200.html

    If a beneficiary wants to rent the house out then they are taken to have acquired the property at the date of death and to have acquired it at market value.

    Terryw | Structuring Lawyers / Loan Structuring Pty Ltd
    http://propertytaxbook.com.au/
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    Lawyer, Mortgage Broker and Tax Advisor (Operating Remotely) www.terryw.com.au

    Profile photo of IvystormIvystorm
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    Hi was wondering if anyone could help me with information, process and cost of adding my sister to mine and my husbands land title in Victoria.

    we want to add her as this will help us have a better borrowing power with the bank as my husbands overtime will not be considered (only 3 months OT) AND because its voluntary not compulsory OT.
    She will be living with us paying board also.

    so is it a simple process as to engaging with a conveyancer and adding her name?

    Profile photo of TerrywTerryw
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    @terryw
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    You should get some legal advice on the consequences first and decide how the property will be owned – JT, TIC in equal shares, TIC in unequal shares.

    Then egage a conveyancer – which may be the lawyer you used above.

    sister will pay the stamp duty on the value transferred to her.

    It will be a CGT event to you and/or husband who are transferring. If your main residence an exemption may apply, if not CGT.

    Before you do all the above best to get the pre-approval in place as if the loan cannot be changed you cannot transfer.

    Terryw | Structuring Lawyers / Loan Structuring Pty Ltd
    http://propertytaxbook.com.au/
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Operating Remotely) www.terryw.com.au

    Profile photo of IvystormIvystorm
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    thank you so much Terry for your helpful answers, really appreciate it. :)

    Profile photo of TerrywTerryw
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    @terryw
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    One additional thing – what will be the consideration fro the sister becoming legal owner. Will it be a gift or will she be paying market rate for the property, or even undermarket rate. This has far reaching tax and asset protection and estate planning issues.

    Terryw | Structuring Lawyers / Loan Structuring Pty Ltd
    http://propertytaxbook.com.au/
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Operating Remotely) www.terryw.com.au

    Profile photo of Curious5Curious5
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    Hi! I’d like to find out what’s the process of adding a sibling’s name onto an existing house title? There will be no money exchange. Are there any legal implications and if there are any costs involved? Appreciate advice.

    Profile photo of TerrywTerryw
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    @terryw
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    Hi! I’d like to find out what’s the process of adding a sibling’s name onto an existing house title? There will be no money exchange. Are there any legal implications and if there are any costs involved? Appreciate advice.

    See above.
    Heaps of legal implications.
    Costs include legal advice, tax advice, conveyancing, mortgage discharge new loan costs and registration of mortgage, stamp duty and possibly CGT unless the main residence exemption can apply.

    Terryw | Structuring Lawyers / Loan Structuring Pty Ltd
    http://propertytaxbook.com.au/
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Operating Remotely) www.terryw.com.au

    Profile photo of Curious5Curious5
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    @curious5
    Join Date: 2018
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    Hi! I’d like to find out what’s the process of adding a sibling’s name onto an existing house title? There will be no money exchange. Are there any legal implications and if there are any costs involved? Appreciate advice.

    See above.
    Heaps of legal implications.
    Costs include legal advice, tax advice, conveyancing, mortgage discharge new loan costs and registration of mortgage, stamp duty and possibly CGT unless the main residence exemption can apply.

    Hi Terry,

    Thanks for your reply. What is the mortgage discharge new loan costs and registration of mortgage? There is no exchange of money for adding family member to the title and there is currently no mortgage on the house though?

    Profile photo of TerrywTerryw
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    @terryw
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    If no mortgage then there should be nothing to discharge or register.

    Terryw | Structuring Lawyers / Loan Structuring Pty Ltd
    http://propertytaxbook.com.au/
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Operating Remotely) www.terryw.com.au

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