Hi – I have an investment in joint with my wife. The 2 parties will remain the same but I'm going to take more of an ownership. So it willl change to tenants in common with both myself and my wife still.
Questions:
1. Can I DIY easily enough? I understand I will have to pay stamp duty but it seems like paying a solicitor to shuffle papers could be avoided as I don't need to do any title searches, etc.
2. It's currently under a fixed interest for another 6 months. Does the bank need to be involved if the parties are still the same? I'm wondering if the bank will consider this as a cancellation of the contract and charge break fees.Thanks,
Luke2 – yes the bank does need to be involved, they will have the ultimate say on the matter as they hold the mortgage & the deeds.
1 – you will still need a title search, if you contact the land titles office they may be able to assist you in the process if you want to go down the DIY path but it may be easier to talk to a conveyancer.Not sur about stamp duty? As you are not selling to a 3rd party, I would suspect that duty 'may' not be payable. However, if it is, what about a seperate contract setting out the change in financial arrangement supported by a lien on the property (costs less than $100 in most cases) plus any legals.
Colin
How does the change in financial arrangement supported by a lien on the property thing work?
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
Will depend on which State, however would suggest that you look at the web sites of the Land Titles Office in your State, most have some sort of guide for completing & logding documents etc.
Your Bank will need to consent to the change, and produce the Title etc (if applicable), but as the proprietors are not changing this shouldn't be a problem with the Bank or their mortgage
If you have a current 50/50 split and wish to change it to 70/30 (and assuming that stamp duty IS payable; which I suspect it is NOT, but must be confirmed by ringing the state stamp duty office) a seperate contract can change the % entitlements without transfer taxes. To ensure that your additional interest is enforcable, you lodge a lien against the property so that if you eventually wish to sell (and you are the 70% holder) the settelment can only go ahead if you release the lien (after recieving your 70%).
Its a messy way to do things but it should save transfer taxes (of ~$15,000+ on a 'standard' priced property) less the additional legal costs and the cost of the lien.If you MUST transfer the property AND you have to pay transfer taxes, consider having the property transfered into a family trust; this will improve your future borrowing capacity. The banks will proberbly require you (both) to sign a personal guarantee (which is an UNREALISED debt).
Colin,
I don't know that would work. You could assign an interest in your property, but if legal ownership didnt change then the tax deductions wouldn't change. ie expense portions between the spouses.
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
I would think the tax deduction would depend on who PAYS those expenses = tax deduction in their tax return.
I don't think so. It comes down to ownership – legal or beneficial.
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,
Please get tax advice. My intial thoughts are that you would have a Capital Gains Tax issue here as a result of both the change in ownership proportions and the change from joint tenants to tenants in common.
Stamp duty issues may be able to be dealt with under an exemption for transfers between spouses. I would strongly recommend that you get a lawyer involved to assist/advise.
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