Stamp Duty

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jnana
Member
@jnana
Join Date: 2006
Post Count: 1
July 28, 2006 - 8:34 am
Hi everyone,
I’m new to property investing and I was wondering if someone could answer a couple of basic questions I have:
1/ In a wrap agreement, who pays the stamp duty- the wrapper or the purchaser/wrappee?
2/ I understand that the purchaser/wrappee is eligible, in most states, for the FHOG. I’m just asking for an opinion. If the wrapper has to pay the stamp duty, would it be fair to ask the purchaser/wrappee to use the FHOG to contribute towards the Stamp duty costs?
Thanks,
Adrian.
vendorfinancerealestate
Member
@vendorfinancerealestate
Join Date: 2002
Post Count: 7
July 28, 2006 - 10:12 am
Adrian,
When you first buy the property, you (the investor) pay the stamp duty.
When the purchaser moves into the property, they are entitled to FHOG, which once again gets paid to you. The FHOG gets credited towards their purchase price.
When they refinance, and pay you out, they are liable to pay their own stamp duty.
You need to note: there is two transactions that take place.
All the Best.
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Richard Taylor
Participant
@qlds007
Join Date: 2003
Post Count: 12,024
July 29, 2006 - 9:57 pm
Adrian
Just to correct a previous post
When the purchaser moves into the property, they are entitled to FHOG, which once again gets paid to you
This is not the case as it varies from State to State. In Qld the FHOG is paid 12 months after the possession date or when 10% of the installment contract price has been repaid whichever is the later. I beleive Tasmania has a similar position on its FHOG payment.
When they refinance, and pay you out, they are liable to pay their own stamp duty.
This is not the case. The Stamp Duty is payable in most States 30 days after the Possession Date which is stated in the Installment Contract. If the purchaser elects to have the loan run the full term i.e 25 years S/D is not payable in 300 months time.
As a consenquence the purchase may have to pay his stamp duty prior to receiving his FHOG. In most cases as First Home Owner the duty is calculated on a concessional basis and really maybe minimal.
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