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  • Profile photo of Ryan273Ryan273
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    @ryan273
    Join Date: 2010
    Post Count: 4
    August 11, 2010 - 2:58 am
    Terryw wrote:
    Hi Ryan

    You would only be transferring half the house so stamp duty on this portion only.

    So assuming house is valued at $440000, it would be stamp duty on 50% of this. How does this work exactly? Is it because my name is already on the title that I only have to pay 50%? Can you provide me with further detail on this.

    Really appreciate your help with the numbers too Terry. Definitely agree that he should be compensating me by paying all loan fees and legals.

    Profile photo of Ryan273Ryan273
    Participant
    @ryan273
    Join Date: 2010
    Post Count: 4
    August 11, 2010 - 1:18 am
    Terryw wrote:
    You wouldn't pay CGT, she would as she is the one selling. You would just need to pay stamp duty and loan fees.

    There is no spousal deals between sisters I am afraid.

    Terry, would you have to pay stamp duty on the value of the house, or half of that as that is effectively the share of the house as you already own the other half.

    I'm trying to crunch the numbers on my situation.. can someone please help me with this.

    Property value (estimated): $440K
    Loan: $275K
    Equity: $440K – $275K = $165K

    So I would need to refinance and pay out my brother $82.5K for his share of the house.

    Payout: $82.5K
    Stamp duty: $20K
    New loan amount: $377.5K

    So I would need to refinance the loan in the amount of $377.5K but this would leave me with LVR of 85.7% so I would have to pay LMI.

    – Is all interest from the new loan tax deductible, including the extra amount borrowed for stamp duty?
    – Do I have to pay stamp duty on 100% of the value, or just the 50% that I am buying off him?
    – Is mortgage insurance avoidable in this situation? Potentially I could refinance to 80% and pay him the rest separately? Can you see any pitfalls in doing this?

    It is becoming a really tough decision for me to make as going through with this is going to leave me in a very negative cash flow position (currently rented at $320/week) and will slow down my plans for future capital growth, plus the fact that I have to pay double stamp duty on the property which is ridiculous! I really think I should be hitting my brother up for stamp duty as I'm not the one who wants out of the investment.

    The other option is we take the house to market and sell and whatever profit is made I can reinvest that in another IP that might show better cash flow for me. My accountant has told me that since it was once our PPOR (around 3 years ago), and neither of us have had our name on another title we would be exempt for any Capital Gains Tax. Is this correct?

    Also, is this worthwhile going through these scenarios with an accountant. The bottom line for me is I don't want to be getting myself in a situation with significant negative cash flow that is going to impede further investment, but at the same time I can still see some really good capital growth in this investment.

    Help is appreciated!!!!! :)

    Thanks,
    Ryan

    Profile photo of Ryan273Ryan273
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    @ryan273
    Join Date: 2010
    Post Count: 4
    July 23, 2010 - 2:44 am

    Who would be obliged to pay the stamp duty here? I'm in a situation with my bro at the moment where we've owned a house for about 4 years now and he wants to sell. House and loan in our name, and we also go the FHOG too. I want to keep the property so we are looking into me buying him out. A few questions:

    – who would be responsible for paying stamp duty (if applicable)? I think he should because I'm not the one who wants to sell the house.
    – is there any complications with the FHOG being involved?
    – what is the best way to transfer house in to my name and pay out my brother?

    Purchase price – $300k
    Mortgage owing – $275k
    Market value – $420k

    Cheers,
    Ryan

    Profile photo of Ryan273Ryan273
    Participant
    @ryan273
    Join Date: 2010
    Post Count: 4
    July 20, 2010 - 1:43 am
    Terryw wrote:
    Well one partner is just buying out the second. So it will be just the same as buying a another property – you need to apply for the loan, bank assesses the applicant, does the valuation, gives the approval and then the solicitor changes the title. The only difference is negotiations between buyer and seller should be easier.

    So apart from solicitor fees, you would also have to pay all relevant banking fees – loan application etc? What about the existing loans which are in both co-owners names? Are there fees for transferring these across to one of the owners?

    Also, if this is just like selling & buying another property does stamp duty apply? Is it true you don't have to pay stamp duty if a person is selling the house for compassionate reasons? ie Selling to family member to assist their financial situation?

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