I’m in a small development in a 50/50 JV with a friend of mine. We bought a block of land in join names, subdividing it into 2 survey strata titles and building two houses. My understanding is that once the building is completed and title issued, both houses will be in join names.
My question is that is it possible to have each of us own one house, i.e., as sole owner on the title? We intend to keep them as investments, but having them in join names is limiting our borrowing capacity as lenders take half of the income and the whole debt when calculating loan serviceability for each of us. We are in Perth if that’s relevant.
An option is to transfer the titles, but then we’ll have to pay stamp duty. Any suggestions?
Thanks in advance,
Donwince and cower.
Stamp duty hurts no matter which way you are bending over.
I’ve just transferred part of a JV over to my name and the Stamp Duty Trolls are merciless. DO IT SOoner than later.
The longer you leave it, the more the property appreciates. And the SDT’s always look for the highest posible val.Agents estimate/purchase price/Lenders Val/random number generator !!
I can’t say I’ve EVER heard of or “thunk” of a structure that would have allowed you to subby as a JV and develop ,.. that wouldn’t incur S.D. when you want to separate your interests. (like you say, necessary for Lender req’s)
Maybe if you had of done the whole process while an option was in place and then put titles in your name at the end. (Strike that thought)
Actually, I think you would still have paid the same amount of SD this way.
HANG ON,HANG ON,
I got it,
You would have needed to separate each others interests in the JV as early as possible, BEFORE any approvals or development was done. So as the SD was only paid on the smallest original investment BEFORE any increase in VAL.
eg: a unit trust straight up!
Even so, You should still only be paying SD this time on the increase in your stake from when you first paid SD…. You wont be paying SD on the WHOLE amount AGAIN!
I hope thisd post madeth sense ,,, I’ve been reading “richest man in babylon” which has slips into poor mans shakespearean …. and am also into a bott of Lindymans CAWARRA ..
Live, Learn and GrowLifexperience
Thanks lifeX. I think I got your point about doing it as early as possible to minimise the SD payable on transfer. The problem is that as we are subdiving the land into survey strata, council will not issue titles until the houses are completed. So we can’t really split right now.
Another issue is CGT because I believe any transfer is a CGT event so it might be better to transfer after 12 months.
There is so much I need to learn… While we are on this subject, will anyone recommend a good accountant who knows PI well in Perth?
Cheers,
DonIt is possible (i have done this three times for clients ) to successfully put a submission to Office of State Revenue asking that the stamp duty be waived. OSR will be concerned to see that the value of both properties is the same or they will simply charge stamp duty on the excess of more than what you originaly owned.. Lets say you build 2 villas on one title both which is owned as joint tenants or tenants in common in equal shares, and you then decide to subdivide and want each person is to hold one villa in their own name. Just put in a written submission with the transfers and evidence of valuation (they might even accept agents appraisals plus statutory declarations with photos and plans annexed showing the relative floor areas) and shouldn’t be a problem. Talk to your solicitor, it’s what we do. Some people think we cost money. We don’t We save money. Jolie
Thanks in advance,
Don[/font=Verdana]
[/quote]Thanks a lot Jolie, that’s exactly what we need. We are building two identical houses with the same builder so it shouldn’t be too difficult to prove that they have similar value, taking into account potential slightly different subdivided block size.
It’d be perfect if you were in Perth… If you don’t mind I ask, do you know any good PI-savvy solicitors in Perth?
Cheers,
Don
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