Hi,
I have stayed away from cross coll thus far however if one was looking at purchasing 4 units making up the whole strata with view to upgrading internally and externally, and with long term potential to amalgamate 4 titles for redevelopment. Would you then consider crossing these securities in one loan?On the basis they are individually Titled and the Contracts allow for them to be sold individually I would look to use a couple of lenders and having each loan standalone.
If they are sold as non strata title block or on a single purchase contract you dont have much of a choice i hate to say.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Ok thanks Richard. They are separate titles, seller just has condition of selling off all at once/together.
If you could make them individual purchase contracts although all conditional upon each other settling then you could still do standalone loans.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Just in case you are not aware the stamp duty on this purchase is likely to be on the combined value, and not on the individual units (which would be much less).
I worked at a law firm where the principle didn't know about the aggregation of stamp duty and got it wrong by about $50k.
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
terry is that even with the separate contracts for sale of each title? Im in WA by the way.
Hi MrsC
I live in WA and have just purchased a duplex pair and have put them in seperate entities, one in my name and one in my family trust. They are strata titled and the vendor only wanted to sell both at the same time. The had someone interested in only one and decided to go with my offer for both. I was aware that stamp duty may be payable on the overall contract value, but when assessed they were separate, that would have cost another $4000.
As Richard said that if you make individual contracts, make sure that a condition is that each settles. Nothing worse than only getting some of them.
As Terry as pointed out, if you go with individual contracts in the same name, you will be up for stamp duty on the overall value. As I was advised it may also be the case if they are in seperate entities.Cheers
JohnMrsC wrote:terry is that even with the separate contracts for sale of each title? Im in WA by the way.I don't know the laws for WA, but in NSW it would be. Even if you used separate entities or even different family memmbers or purchased up to 12 months apart the stamp duty could be aggregated. I suspect it is similar in WA so you should check with your solicitor and then factor this added expense in (if any).
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
thanks, definately something to factor in. The sales agent has made a point of advertising the sale as coming with benefit of saving $$ on SD. But i definately dont want to believe that yet! need to investigate.
MrsC wrote:thanks, definately something to factor in. The sales agent has made a point of advertising the sale as coming with benefit of saving $$ on SD. But i definately dont want to believe that yet! need to investigate.Aggregation applies in WA too!
see
http://www.austlii.edu.au/au/legis/wa/consol_act/da200893/s37.htmlDuties Act, s 37.
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
Thanks Terry, well i would like to know where agent got his info now.
Agents shouldn’t be advising on legal matters. If he did and u suffered a loss you could sue.
Anyway, just because there is aggregation doesn’t mean it will apply in this situation. I didn’t read the section so don’t know if it applies
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
This will be a double post-
MrsC – I’m currently buying a block of 4 units myself…slightly different too you as it’s under one title.
With your one, since it’s 4 sperate title then you WILL need to go to separate lenders – as most lenders have a policy where they will not take in more then 25-30% of the total risk in one building…even if it’;s a small block of 4….so most likely 1 -2 title per lender; this strategy provdies the bank prorection and also gives you protection and diversification as well.Terry- aggregation of stamp duty is allowed in NSW and QLD…BUT from what i understand from my lawyer and from the numbers i done- aggregation of stamp duty is MORE expensive then separate purchases? and thats the reason why the Gov as set aggregation of stamp duty in the first place.
IE purchase a $500,000 NSW property stamp duty = $17,900
Purchase a $1,000,000 NSW property stamp duty = $40,490Regards
MicahelMick C | Shape Home Loans
http://www.shapehomeloans.com.au/
Email Me | Phone MeSame Banks. Better Rates. Served With a Passion.
Stamp duty aggregation is not “allowed” but rather Compulsory
I be happy to be proven wrong! could save me thousands on my next block of unit purchase !!
Regards
MichaelMick C | Shape Home Loans
http://www.shapehomeloans.com.au/
Email Me | Phone MeSame Banks. Better Rates. Served With a Passion.
Yes thats right. Because of the % of stamp duty increases as the amount of purchase increases aggregation will result in much more stamp duty being payable.
I hear it is particularly tough in VIC where you could be ht with aggregation by buying 2 houses in the one street, even where they are not next to each other and may be purchased months apart
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
Phew glad you corrected that Michael as my last unit block i purchased we ended up paying on Aggregation.
Of course there are a couple of legal ways around it if you use different entities and adjust the purchase price.
Recently purchased a block of 4 2 units in my SMSF and 2 in personal names. Keeping then for 366 days meant i paid 10% profit in the SMSF yet still claimed the CGT discount personally.
Just a matter of weighting the units accordingly and putting up a good case with accompanying valuations why 1 unit should be worth more or less.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
You must be logged in to reply to this topic. If you don't have an account, you can register here.
