Buying Deceased Estate - Pros, Cons and Gotchas

Discussion in 'What to buy' started by Shawn Donaldson, 17th Mar, 2017.

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  1. Mick Butterfield

    Mick Butterfield Well-Known Member

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    My understanding is that there is no legal obligation to declare this also. If it was the scene of a murder or highly violent crime then it would need to be declared as it is a material fact to the sale of the property.
     
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  2. hobartchic

    hobartchic Well-Known Member

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    There's no more pros with a deceased estate than any other except vendors may be more motivated. They seem to be selling well at, or above market price in Tasmania at the moment. I do not know whether or not it is illegal to hide the fact that a property is a deceased estate but it strikes me as misleading to not answer a straight question about it. I know an agent that lied to me about this and I will not deal with her. The main con can be that sometimes maintenance is withheld for a long time. It pays to get a building and perhaps structural engineering report done on older dwellings and be careful if buying a property off family members.
     
  3. Terry_w

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

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  4. juxt1n

    juxt1n Well-Known Member

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    So then the Owner(s) who actually have their names on the house, if they die whether it be in the house or on a trip, lets say the son (also lives in the house) puts it up for sale. Would this be termed Deceased Estate? How is that different to whole family being murdered in their sleep eg LIN house, obviously someone alive put the house up for sale wouldn't it be a Deceased Estate as well?
     
  5. wylie

    wylie Moderator Staff Member

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    If the house passes to the son via the will, then it will be put into his name. Once that is done, it is his house and not a deceased estate.

    @Terry_w has explained it very well above.

    It is very different to a whole family (or even one person) being murdered in a house.
     
  6. wylie

    wylie Moderator Staff Member

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    Often the advertising mentions "deceased estate" because people think they are going to get a bargain.
     
  7. Terry_w

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

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    They both potentially be deceased estates. The difference is homes where major crimes have been committed would need to be disclosed by the seller.
     
  8. Terry_w

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

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    And note that this disclosure law only applies to agents in NSW. It doesn't necessarily apply to someone else, such as an executor, selling the property as their are not bound by the
    PROPERTY, STOCK AND BUSINESS AGENTS ACT 2002 (NSW)
     
  9. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    It can also indicate that the contract will be free of conditions on sale such as a need to buy elsewhere etc. Many renovators see deceased estates as gold as they can often lack modern finishes and are like unpolished gems. Or a dump ready for demo but then a good agent would be seeking developer interest and disclose its virtually land only value..It just depends what the land use value is....Townhouse / units suitable site may be worth more.

    Why dont agents advertise "land value only - Knock down ready" in their ads much?
    Clever agents know it can create a GST problem and is a turn off tho developers. For example if the executor was to demo the house and clear the block with a DA for t/houses this may be GST taxable land and the develop may be unable to claim the GST too. Leave the old house and market it for sale and it may not. What would really be input taxed existing residential premises can becomes a taxable supply in some cases. This is best avoided and so marketing of property tends now to avoid such terms to protect the vendors. All this means the margin scheme is retained making the property more attractive to developers.

    When I see deceased estate I think the margin scheme is likely to apply (subject to legal & tax advice)
     
  10. Scott Townsend

    Scott Townsend Well-Known Member

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    Hi @Terry_w

    Re opening this thread wondering if you could shed some light - in. Murder house the agent must declare to potential buys. If the new buyers demolished and built new or subdivided the property and either built 2 or sold land - does this still need to be disclosed?

    Cheers
    Scott
     
  11. Terry_w

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

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    Interesting question. I don't know, you would have to look at the legislation for the relevant state. since what is being sold is the land, I would think it would still need to be disclosed.
     
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