Hi guys, another question. I’ve tried doing searches but can’t find my answer. Are there any tax benefits to taking property, or for that matter, using property, as part payment for another property. Eg we have a place worth 220 and would like to buy one at 350, with a probability of the owner accepting the trade, but I wondered what the benefits are against purchasing it outright. We can see the potential for subdivision with this 350 place and are currently subdividing land off the 220 place.
Anybody done this before? How did it go, what benefits are there tax wise?
Thanks, Redhaven.
What do you mean trade?
Property and cash for new property?
Byronent
Adelaide SAYou just write the contracts up with the property prices allowing for the trade price. In other words, the vendor / buyer pays you 220k and you pay them 220k + 130k. Obviously, the 220k never actually changes hands. Title jus passes on the day of settlement.
Robert Bou-Hamdan
Mortgage Adviser
http://www.mortgagepackaging.com.auFREE Finance-Related Newsletter – Click Here
Comments made are of a general nature and should not be construed as individual advice.
© 2004 Mortgage Packaging Pty LtdOk. So if it were an even trade, would the stamp duty still apply? And apart from saving agents fees on selling our place and then again on buying hers, what other benefits are there…or is that it?
Redhaven
Sorry Byron didn’t mean to ignore you, yes thinking of trading our property plus use a bank loan for the rest.
You will not get out of the Stamp Duty. This applies any time there is a change of name on title. And it does not have to be an even trade. You just make it look like a normal sale.
Robert Bou-Hamdan
Mortgage Adviser
http://www.mortgagepackaging.com.auFREE Finance-Related Newsletter – Click Here
Comments made are of a general nature and should not be construed as individual advice.
© 2004 Mortgage Packaging Pty Ltdyou can reduce stamp duty, it is shonky but if you both agree to trade a 220 property for say $150k or something like that.
You then run the risk of the stamp duty office asking for a valuation for stamp duty pupores.
Byronent
Adelaide SADefinitely not interested in doing anything shonky. However if there is a legal way to reduce loss then that’s what I was after. Not to worry, there’s more than one way to skin a cat, as my daddy always says!!
Red.
as there is no real benefit to trading vs selling for cash you will often find that both parties in a trade either have unrealistic expectations of the properties value or the market generally doesn’t like what they have to sell. I have seen people trade only to find their problem perpetuated. often you are better just clearing the books and selling the property at its market value. But I have sene some effective trades conducted where the 2 parties do generally move into stock that is more suited to their portfolio. Think hard though about gems and barter card points.
http://www.megainvestments.com.auExtensive list of ‘Off The Plan’ property available for sale in Perth.
John – 0419 198 856
Thanks everyone for the feedback, I think we would be best just buying conventionally. And to be honest I don’t know what gems and barter points are![blush2]
Redhaven
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