Has anyone worked out how to take advantage of the $7000 First Home Owner’s Grant and exemptions from Stamp Duty and Mortgage Duty when entering into a WRAP agreement with a first home buyer in NSW?
Pyramid
Pyramid
Must admit i am slightly confused about your comment “take advantage of the $7000 First Home Owner’s Grant and exemptions from Stamp Duty and Mortgage Duty when entering into a WRAP agreement with a first home buyer in NSW?”
The Grant is payable to the purchaser although obviously one of your contract conditions in your installment contract could be that you assign the grant to the purchasers account in respect of their deposit or part deposit.
The saving in stamp duty is again for the benefit of the purhcaser and whilst might mean they can offer more of a deposit as they have to pay less in stamp duty i would hardly call that taking advantage of the situation.
Cheers Richard
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Richard Taylor | Australia's leading private lender
Richard
Many thanks for your post. I apologise for the ambiguous question. Allow me to clarify.
As I understand it, a first home buyer in NSW can qualify for the First Home Owner’s Grant and also First Home Plus.
The First Home Grant is usually paid to the buyer upon settlement. In a WRAP situation, the settlement may not occur for another 20 years or so. Is there a way for the buyer to access this earlier?
Similarly, stamp duty is also paid on settlement. How can the buyer bring this forward in a WRAP contract?
And finally, with a WRAP (or vendor finance), how is mortgage duty addressed especially when the vendor is not an approved financial institution?
Any light you or anyone else can shed on this will be most appreciated.Pyramid
Hi Pyrimid
In NSW the FHOG is payable after exchange of contracts. Hence your wrapees simply get their solicitor to apply for the grant.
NSW law requires stamp duty on the transfer of land to be paid within 30 days of exchange of contracts. If your wrapees qualify for the FHOG then they may not have to pay.
An Instalment Sales Contract is not a registered mortgage and therefore stamp duty is not normally payable in NSW.
The interesting point is that, for the purposes of most NSW state legislation concerning the payment of duties, etc the sale is deemed to have taken place on exchange of contracts.
Of course, check with your (wrap savvy) solicitor on all these points.
Cheers, Paul
Paul Dobson | Vendor Finance Institute
http://www.vendorfinanceinstitute.com.au
Email Me | Phone MeAn alternative way to finance your home.
Hi Paul
Thanks for your response. It all makes more sense to me now. I am new to WRAPs and do not have a WRAP savvy lawyer. Do you have any suggestions for Sydney based lawyers?Cheers
PyramidHi Pyramid
We use Tony Cordato. Have a look at his website at:
http://www.businesslawyer.com.auAs you are new to wraps I’d also suggest you join the Vendor Finance (Wraps) Association of Australia. It’s website is at: http://www.financewraps.asn.au
Good luck with your wrapping.
Cheers, Paul
Paul Dobson | Vendor Finance Institute
http://www.vendorfinanceinstitute.com.au
Email Me | Phone MeAn alternative way to finance your home.
Hi,
Check out section 13 of the FHOG act for qualifying and understand the meaning of “possession”; and
Check out section 26 of the Sale of Land act for examption of the land tax and again understand “possession”
You can find the acts at http://www.austlii.edu.au
Regards
Michael G
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