Advice on transferring IP into spouse's name?

Hi all

Wife and I own several IPs and one principle place of residence, all under my name alone. Her yearly income is zero. Two of the investment properties are positively geared and the loans still being paid down, we were considering transferring these properties into wife's name only. I understand transfers can be exempt from stamp duty under specific circumstances, and was wondering how this process would unfold for investment properties. Both have been rented out for less than 6 years and both were originally our PPORs before being rented out (we lived in them first then rented them out). Hypothetically, how could we go about doing this? We will be seeking professional advice but appreciate any advice here, Thanks

 

It sounds like you own the properties not your wife.

Unless you divorce & it's part of the settlement you probably won't escape paying stamp duty & CGT. CGT may be reduced if you apply the PPOR exemption to one of those properties but you will lose the exemption on the others for that overlapping period - so you need to pick the horse which gave the biggest increase. No idea if you can split the period.

Stamp duty for the transfer & CGT will be payable at market rates ie valuation to satisfy ATO & SVO.

It may be possible to transfer 50% of your house to your partner without CGT or SD if your state permits this transfer.

 

I always wonder, is it cheaper to divorce then remarry your wife than paying stamp duty

 

Acquired all before I met her in my late 20s. But you know how it is.

If we decided to transfer say one property into wife's name, without consideration, as a gift, would stamp duty still come into it?

 

yes and cgt and new loans

 

SRO Victoria website says the opposite?

 

I don’t think so

 

Hot Topic: Does your relative pay stamp duty if you transfer a property to them? | State Revenue Office

Who is correct? You or the SRO?

 

Spouse and partner exemption | State Revenue Office

 

Me. The duties act has a few exemptions available such as
a) for the transfer of the ppor from one spouse to both spouses, and
b) on the breakdown of a relationship
c) death

But there is no exemption for the transfer of a non ppor for reasons other than the above.

This comment from your link is incorrect
"This means transfers to someone who you are legally married to, or to someone with whom you are in a genuine domestic relationship, irrespective of gender, are free from stamp duty."

 

If the 6 year CGT rule applies (treating former home as main residence), is there a duty exemption if either 50% is transferred to spouse or 100%? Both IPs were previously PPOR <6 years ago but let's keep it simple and say we want to transfer one of them to spouse either 50% or 100%. Under these rules can this property be considered PPOR for CGT purposes and the purpose of this transfer?

 

If you had been absent for less than 6 years, and meet all other requirements, it could be CGT exempt at that point.
But going forward it is different.

 

Sorry I didn't make that part clear. We have been absent for less than 6 years from both of these particular IPs, and living in another property (non-rented).

So does this mean we can treat one of these IPs as our PPOR and proceed with a property transfer to spouse (50% or 100%) and avoid stamp duty and CGT?

 

Stamp duty and cgt rules are different right.

so even if something is cgt exempt under the 6 year rule, is there a 6 year rule for stamp duty exemption?

 

I thought since either of these IPs would be considered PPOR under the 6 year CGT exemption rule that it would also be considered PPOR for the purposes of spousal transfer. Wrong or right?

 

No. It means one could potentially be exempt from CGT

 

wrong. Stamp duty is covered by the duties act vic, state law. CGT is covered by the income tax assessment act - commonwealth law

 

So how is it that it can be considered PPOR by the Commonwealth via 6 year rule and not PPOR by the state via duties act?

And how is it that SRO put "incorrect comments" on its own page?

 

Different legislation.

I have no idea. It was correct, but only for very specific scenarios.

 

Video on that SRO page makes it even clearer. These "very specific circumstances" are not mentioned, curiously. Maybe you're not as familiar with Victorian stamp duty laws as you are NSW?