Im not sure if this is the best place to post this question but I see the term vendor finance come up a lot so I am hope someone here has some good advice for me.
My wife and I recently entered into an installment contract to purchase a house.
At the time, we were led to believe that we would be exempt from paying stamp duty on the purchase of the property as we were first home buyers and the purchase price was under $250k. However, to get the exemption, we had to fill out forms and send them to the office of sate revenue here in QLD.We then received a $10k bill from the SRO for the transfer duty. Upon inquiring about the bill, we were told that we would not be able to claim the exemption until the house was actually transferred to our name, and that the transfer duty was calculated on the sum of the installment contract including interest.
Does anyone have any experience with this scenario, or can someone recommend a good solicitor who has experience with this in QLD so I can lodge and appeal on this decision?
How can they make me pay the transfer duty if the house has not been transferred to my name? How can I not be eligible for the exemption until the house is in my name, but still be liable to pay now for a house that is not in my name?
Any help or links to better places for help would be greatly appreciated.
Thanks in advance
Geoff..
Hi Geoff
Bit of bad luck there.
See http://www.austlii.edu.au/au/legis/qld/consol_act/da200193/sch2.html
In QLD duty arises when an agreement to transfer dutiable property is entered into. Schd 2 Duties Act
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 Geoff
In Qld, as a first home buyer you are eligible for an exemption on Transfer Duty and the $7,000 FHOG (after 12 months of occupation) when buying your home with an Instalment Contract. See:
http://www.osr.qld.gov.au/legislation-rulings/public-rulings/fhog/fhoga019-1.shtml
http://www.osr.qld.gov.au/legislation-rulings/public-rulings/fhog/fhoga019-1.shtml
http://www.osr.qld.gov.au/duties/transfer-duty/exemptions-and-concessions/home-transfer-duty-concession-rates.shtmlWhile we will not sell a property to a buyer that does not receive independent legal advice, I'm guessing here that you may not have used a solicitor? If not, or if you used a solicitor who is unfamiliar with Instalment Contracts, I'd suggest you contact a vendor finance savvy solicitor who can put together your appeal. My two recommendations are:
Despina Priala
Priala Legal
Ph: 07 5527 8796Mark Game
Aylward Game Solicitors
Ph: 07 3236 0001Cheers, Paul
Paul Dobson | Vendor Finance Institute
http://www.vendorfinanceinstitute.com.au
Email Me | Phone MeAn alternative way to finance your home.
Thanks for your advice Paul. We did get legal advice, and even though he pointed out some very useful things in the contract, he made no mention of the transfer duty needing to be paid right now. I will contact one of the solicitors you suggested and find out if it is worth appealing or would it be cheaper to try and pay it off and claim it back later which seems counter productive and only serves to make the government more money in interest since we cannot afford to pay it outright.
Regards
Geoff TaylorGeoff sorry to hear your Solicitor didnt point this out.
As Paul has mentioned the FHOG in Qld under a VF Contract is payable 12 months of possession however the other underlying condition is that you have re-paid a minimum of 10% of the Gross Sale Price back to the Vendor. Depending on the interest rate charged and the term of the loan you could find this is well over 12 months nearer 2 years.
We have this as a disclaimer in our VF Contract but you be suprised how many clients dont read it.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
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