buying at auction via proxy

Discussion in 'Legal Issues' started by Rooky, 13th Nov, 2019.

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  1. Rooky

    Rooky Well-Known Member

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    I am just wondering that at auction if you buy as "<person name> or nominee" and then use another holding entity as nominee in actual settlement/contract, does it attract stamp duty twice?

    Is it okay if nominee entity is not incorporated at time of auction?
     
  2. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    Watch out for liability, asset protection and stamp duty issues. CGT potentially too
     
    Curious2019 likes this.
  3. Paul@PAS

    [email protected] Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    A person who is dead, not born etc cant contract. What makes you think a entity can make a contract if its not in existence ? Is it a contract with the entity or the bidder ?

    I always recommend a legal entity is formed and all documents executed etc at LEAST the day prior or far earlier where possible. Not even on the day as it could be argued the chicken came before the egg. And all finance is approved of course. You dont want some glitch where you assume personal lending is approved and then throw a entity into the mix. The lender may change its approval or even refuse it and the auction bid could be costly. To the bidder.

    The cost of seeking legal advice will likely be far less than the concerns created.
     
  4. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    I'll give some free legal advice. Don't.
     
  5. Paul@PAS

    [email protected] Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    Its up there with backdating a document
     
  6. Curious2019

    Curious2019 Well-Known Member

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    Get your structuring sorted before you go to auction. Be aware that borrowing in different entity types can be difficult, we found this out the hard way after buying a block of land using a company structure. Too late to change without paying stamp duty again!
     

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