Hi There
My brother and I have just offered $250k to buy our first property – a reno job in ipswich.
After going to Steve's seminar the other week for property investors just starting out, he said it was imperative to have the right structure in place from the start.
I know I need to see an accountant about this, but we don't want to miss out on the property and we are meant to sign the contract today.
Basically, if someone could offer advice – we just want to know if we should put our name on the contract or our company name (which we haven't set up yet), or the trust name (same deal). We're not even certain how this should all be structured . . . but at the moment my brother is the only one who will get finance for the loan, so presumably he has to be on the contract as guarantor somewhere
Is it against the law to put a company / trust on the contract if it isn't set up yet?
how long does it take on average to set up that stuff?any help would be greatly appreciated
cheers
Yes of course it is illegal to put a company name on a contract for a company that doesnt exist. Both your names can go on the contract.
ok thanks.
i'm glad there are some sensible people out there that take the time to answer my stupid questions!
if you could please answer one more –
if we put both our names on the contract, do you know if we are able to transfer the property into the name of our company at a later date without leaving ourselves liable to paying double stamp duty or other costs?
also, if title is held in a company name, are we still able to access first homebuyers grant, etc?
thankyou! i know these must seem simple questions but it really helps . . .
if we put both our names on the contract, do you know if we are able to transfer the property into the name of our company at a later date without leaving ourselves liable to paying double stamp duty or other costs?
No any Transfer will incur Stamp Duty and if the property was a originally an investment property you may also incur CGT.
if title is held in a company name, are we still able to access first homebuyers grant, etc?
You would not qualify for the FHOG if the property is purchased in the name of a Company.
Richard Taylor | Australia's leading private lender
In Victoria it is permissable to sign "Billwha and/or nominee" and confirm the entity/owner prior to settlement. The Co and/or trust needs to exist prior to settlement. Not so sure about QLD. Seek legal and accounting advice…….and don't rush. There will be other sweet deals.
It is very expensive to undo "wrong ownership" and transfer after the event, by way of stamp duty and if further down the track with deemed CGT issues.
If this is your first property, I wouldn't be too fussed to purchase in complicated entities. If your brother is the only one securing the loan you might wish to investigate (with your solicitor) buying as tenants in common with him having 99 % on title and you having 1 %. That way the majority of the loan is deductable against his income and he cannot sell without your OK. You may then want to sign an agreement or memorandum/contract that indicates how will split subsequent profits, and who will provide the work/sweat in the renovation you are planning.
Best to get it all in writing first and be advised by a Qld solicitor……….and hasten slowly.
In Qld you cannot purchase a property using "An or nominee" and expect not to be hit with addition Stamp Duty.
Richard Taylor | Australia's leading private lender
Thanks for that Richard,
Always keen to learn……..that has clarified a point for me that I was unsure of.
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