All Topics / Hotch Potch / How will new stamp duty affect wraps?

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  • Profile photo of _se7en__se7en_
    Member
    @_se7en_
    Join Date: 2003
    Post Count: 100
    April 6, 2004 - 2:12 am

    NSW has introduced a stamp duty levy on the sale of investment property of 2.25%, how will this affect wraps?

    Profile photo of walkernickwalkernick
    Participant
    @walkernick
    Join Date: 2002
    Post Count: 68
    April 7, 2004 - 10:15 am

    Hi,

    I would imagine that the new stamp duty would be due when the Instalment Sales Contract is signed.

    That is, a wrapper would pay the normal stamp duty on purchase (calculated on the price at which they purchased the property), as well as the new stamp duty (calculated on the price they onsold the property at) – as long as their markup was 12% or greater. Essentially they are being double taxed at time of purchase.

    Perhaps NSW wrappers will get creative and only markup properties by 11.9%, and charge a higher interest margin to avoid being double taxed at the start of the wrap??

    Nick

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