I've recently been asked if i'd like to sell my investment property with a 12 month settlement time, in which the buyer wants to rent it for 12 months whilst doing their desired renovations. Has anyone done this or have any comments in relation to this, i.e. legality, tax, risk etc
Hi Dave
What's the benefit for you?
What's the buyers reason for wanting a 12 month settlement period? Is it because they can't complete the purchase now and require more time to come up with the funds? Or are they looking to flip the property after they've completed the renos?
What is they don't end up settling and the work the renos they've done are of poor quality or are incomplete?
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
Sounds like they want to flip it, to me. So they can try to avoid paying the stamp duty. They will just try to onsell it.
It's a risk. Unless there is some great benefit I wouldn't do it.
Are you highly geared? If so you'll be losing money in the 12 months.
The risk is that they damage the property or change it in a way that you don't like and then not settle. You may have to sue them only to find they have no assets. Make sure you get legal advice (from a lawyer!)
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
Hi Dave
Which state are you in? If you do go down this path then I'd be listening to Terry's post about seeking legal advice. If you happen to be in Sydney, I'd be contacting him.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
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