A family member has offered to purchase my ppor below market value to effect a quick sale owing to my unforeseen financial difficulty. What considerations should I make? They have suggested I can rent the property back from them and re-purchase back from them in the future.
Stamp duty will be the killer – for them when they buy and then for you when you re-purchase. You will also have legal fees. If you are having financial troubles and you actually go bankrupt the transaction can be reversed – if it was done with the intention of defeating creditors then there is no time limt. If it was done at markert value and the other person didn't know you were going bankrupt then I think it is a 2 year period in which in can be clawed back. So time is of the essence if you are going down. Try to do it for market value and hang on for as long as you can. And seek proper legal advice or it could cost you.
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
Thank you Terry. Have been hanging on with 3 properties on the market and 2 deals that fell over on finance. Glut of property for sale in my area. If I sell this property I will have no financial troubles and time is now of the essence otherwise I would hold on for market value. We have considered stamp duty and legal fees which seems a better option than default on all 3 properties. It seems a simple solution until one of the other properties sell but am concerned I'm missing something??
In that case it may be best to wear the stamp duty and get out, save your credit rating and get back on track.
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
Depending on the amount of discount you intend to offer them (which i assume would be fairly substantial) wouldnt you be better off to get them to lend you sufficient funds and take a 2nd mortgage.
Even if you capitalised a years interest upfront you would have to better off especially if you feel this is a short term problem.
Richard Taylor | Australia's leading private lender
hi caroleh are you in victoria
Not sure how 2nd mortgages work but will research and consider. Thank you Qlds007.
No, not in Vic – MickinVic – but presume you are.
You must be logged in to reply to this topic. If you don't have an account, you can register here.
