Buying out friend of PPOR

Discussion in 'The Buying & Selling Process' started by 1stepcloser, 15th Jan, 2019.

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  1. 1stepcloser

    1stepcloser Well-Known Member

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    Hello,

    I went 50/50 with a mate in my PPOR now I am looking at buying him out, I thought it would have been just a matter of paying his loan out and removing his name from the deed. I just spoke to a conveyancer and they are saying I will have to pay stamp duty on his half of the property??

    Thanks Matt..
     
    1stepcloser, 15th Jan, 2019
    #1
  2. Propertunity

    Propertunity Well-Known Member

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    Yes, you’re buying half a house. You pay stamps. It’s not a spousal transfer I assume? :)
     
    Propertunity, 15th Jan, 2019
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  3. Terry_w

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

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    Transfer of property usually results in duty.
    He might also have to pay CGT, unless he is exempt.

    You will also need to reapply for the loans, discharge the mortgage and relodge a mortgage.
     
    Terry_w, 15th Jan, 2019
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  4. Trainee

    Trainee Well-Known Member

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    You thought this, based on what?
     
    Trainee, 15th Jan, 2019
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  5. 1stepcloser

    1stepcloser Well-Known Member

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    I dont know wishful thinking
     
    1stepcloser, 15th Jan, 2019
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  6. Trainee

    Trainee Well-Known Member

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    Some tax issues for your friend too. Have you paid him rent?
     
    Trainee, 15th Jan, 2019
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  7. 1stepcloser

    1stepcloser Well-Known Member

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    No I wasnt paying him rent I was just paying my half of the loan off.. But he moved out a while ago and my mate was renting his room off him paying him rent..
     
    1stepcloser, 15th Jan, 2019
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  8. Terry_w

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

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    It could be CGT exempt for him if he had no other main residnence, and neither did his spouse etc.
     
    Terry_w, 15th Jan, 2019
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  9. jazzsidana

    jazzsidana Well-Known Member

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    Thought required another thought I guess.. :eek:

    Agree with Terry_W!.
     
    jazzsidana, 15th Jan, 2019
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  10. WattleIdo

    WattleIdo midas touch

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    Surely you will need to get the property valued and pay him half the market value ... ?
     
    WattleIdo, 16th Jan, 2019
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  11. Scott No Mates

    Scott No Mates Well-Known Member

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    Nah! Mates rates. ;)
     
    Scott No Mates, 16th Jan, 2019
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  12. S.T

    S.T Well-Known Member

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    Now that gay marriage is legal, maybe you can get married then do a spousal transfer?
     
    S.T, 16th Jan, 2019
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  13. Terry_w

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

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    all they have to do is kiss!
     
    Terry_w, 16th Jan, 2019
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  14. shreko

    shreko Well-Known Member

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    Hi
    I have a similar query if someone could help out. I own a property with my brother and we are having trouble selling. He wants to sell for whatever we can (thinks the sky is falling in) and I want to hold and rent out.
    I want my partner to buy my brother's share, but I don't know how that works. From a conveyancing point of view, it would be a simple ownership change and stamp duty payment.
    but from the bank point of view - what would be the best way to refinance. I can't figure out in my head how the bank would complete the transaction.

    Any direction or recommendations would be appreciated.
    thanks
     
    shreko, 30th Jan, 2019
    #14
  15. Terry_w

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

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    Just like buying any property really. Get some advice, get loans pre-approved use a solicitor to change title at settlement.
     
    Terry_w, 30th Jan, 2019
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  16. Paul@PAS

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

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    A 2 spouse to 1 spouse transfer isnt exempt from duty
    A marital settlement will avoid CGT and most of the duty.

    Like the movie Strange Bedfellows with Paul Hogan and Michael Caton
     
    Paul@PAS, 30th Jan, 2019
    #16