All Topics / Legal & Accounting / Buying ex-partner out of unit in NSW. CGT & SD exempt?

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  • Profile photo of montyausmontyaus
    Member
    @montyaus
    Join Date: 2009
    Post Count: 2
    September 23, 2009 - 10:10 am

    Hi,

    This is a great resource here & I've found out a lot but am stuck on a couple of points.

    Here is some background: My partner of 8 years & I purchased a unit in NSW in 2004. We split up 2.5 years ago. We have both lived in the place since then for about 50% of the time each. I'm currently living here as my PPOR.

    We both have an good agreement with eachother & there is no personal issues.

    Now we are both at the stage where I'm going to buy him out.

    My questions are:
    1. Will I need to pay CGT (as it's my PPOR).
    2. Will I need to pay Stamp Duty? As i'm simply waning to remove him from the title/mortgage.
    3. When the mortgage term expires (December), am I required to do anything in particular to have my name as the sole owner when I take out a new term? (currently we are both on the title/mortgage).

    I really am asking, can I just give him cash & he walks away, or are there other complications?

    Thanks in advance

    Profile photo of Scott No MatesScott No Mates
    Participant
    @scott-no-mates
    Join Date: 2005
    Post Count: 3,856
    September 23, 2009 - 10:23 am

    Unless it there is a transfer because of a breakup of a relationship you will probably be hit by SD & CGT (only the selling partner on their portion). If you have both lived in the property from the start or this has been the only ppor of your partner during that period, he could qualify for an exemption from cgt (6 year rule). There are many more qualified than me to answer this one.

    Profile photo of crjcrj
    Participant
    @crj
    Join Date: 2004
    Post Count: 618
    September 23, 2009 - 11:41 am

    If it's done as a documented property settlement you can be exempt from stamp duty and he can be exempt from CGT.  See a lawyer or a community legal centre

    Profile photo of montyausmontyaus
    Member
    @montyaus
    Join Date: 2009
    Post Count: 2
    September 23, 2009 - 12:01 pm

    Thanks for your replys.

    Just to clarify. When we split up (breakup of the reltionship @ Scott no mates), He stayed in there for just over a year & then moved out, then I moved back in and am here now by my self. So it's been our PPOR since 2004. When we both did our away stints, this was work related, so assume this does not effect the sitsuation much.

    So I take it from what crj said, we could possibly both avoid if we have a documented property settlement.

    I'm not across the "6 year rule" but will research.

    I will also contact the lawyer as suggested.

    Thanks for your help.

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213
    September 25, 2009 - 9:20 am

    s 126-5 ITAA 1997 covers CGT and marriage breakdowns
    http://www.austlii.edu.au/au/legis/cth/consol_act/itaa1997240/s126.5.html

    s 68 Duties Act (NSW) covers the stamp duty and marriage breakdowns
    http://www.austlii.edu.au/au/legis/nsw/consol_act/da199793/s68.html

    If the property has been your main residence for the whole period it will probably be CGT exempt.
    If you don't have a court order, you may still apply for an exemption from the stamp duty.

    I see you said you moved out at one stage, so you may be able to apply the '6 year'' rule and still class it as your main residence under some conditions – such as not owning another property during the same time – abd ve CGT exempt.
    see s118–145 of the ITAA 1997.
    http://www.austlii.edu.au/au/legis/cth/consol_act/itaa1997240/s118.145.html

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

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