Hi Everyone,
I have read a bit about simultaneous settlements and have come across a situation where I think this could be a good idea. My question is how do you go about doing so without stamp duty twice? Is there some kind of set up needed?
Thanks in advance,
Kate
Hi Kate
Do you want to elaborate on what you are referring to.
I think i can take a guess from you last comment but not sure if we are on the same page.
You might be looking at a Call Option but it won't get you around the Stamp Dury in a couple of States
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
A simultaneous settlement (in WA) is two or more properties settling on the same day.
Eg. Refinance from another bank and a purchase at the same time.
Stamp duty is paid on the purchase only.
Colin Rice | CDR Finance
http://cdrfinance.com.au/
Email Me | Phone MePerth Based Mortgage Broker - Investment Property Finance Specialist | E: [email protected]
You can't do it without stamp duty, usually. You enter into a contract to purhcase and then quickly sell the same property. At settlement you organise it to all happen simultatenously. It will be a crowded table with cheques being handed around but at the end of it you should have a cheque left in your hands but no property or loan. However if the end purchaser doesn't settle you are in deep trouble.
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 Guys,
I was meaning exactly what Terryw has said. I have read this strategy in a number of books and they all mention if it is structured correctly the 'middle man' so to speak won't need to be stamp duty, only the final purchaser. However, it never went into detail as to how this is possible, hence the question.
Thanks,
Kate
Hi Kate
Ok see what you are talking about.
Will depend on each State as to whether double duty is charged but you could either do it as a Call Option or Transfer by Direction.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Richard
coudl you provide more information on the above options? or direct me to where i can find it?
thanks in advance.
try the duties act of the state the property is located in. Duty would apply in most states I would imagine.
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 sounds like something I have done myself called an “Assignment of Contract”. After construction began on my last IP, I saw the opportunity to make some money onselling land in the Estate my IP was being built in due to the high level of demand (10 registered buyers per available block) and long settlement times. I successfully got my hands on 2 blocks but it was only through sheer luck that I was successful in my endeavour. Thankfully the land agent gave me some good advice throughout the process enabling me to be successful in onselling.
1. Always sign a contract “and/or nominees” after your name. This allows you to change the name(s) on the specific contract you signed to secure the property. If you don’t and put your name only then you’ve just entered into a contract to make the purchase yourself. And be careful because if you haven’t found a buyer come settlement time, or as Terryw wrote if the buyer doesn’t settle, then you’re in trouble. If you haven’t found a buyer then you’re obliged to settle on the property yourself. I imagine it would be a similar outcome if your buyer doesn’t settle.
2. Make sure you are allowed to do whatever it is you’re considering. I was lucky in that the Estate that the land I onsold was in allowed such sales to take place. The Estate next door though had clauses in its land contracts that stated if you sold/onsold a block of land it had to be back to the developer for the original purchase price.
This occurred in South Australia, other states may be different but this was my experience.
cheers
Pete
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