Hi all, What would be the process for buying a property from a relative? I have a cousin who wants to buy a property (in Sydney) from an uncle. They are not directly related. Obviously, the cousin would need to "buy" the property at market value and the uncle is subject to CGT. Can a property lawyer organise everything as per a normal property buy (minus the real estate agents)?
It should be treated like they were selling to a stranger. Contracts entered into and price agreed upon in writing etc. One lawyer could act for both or they could get separate lawyers.
You should also get a valuation for stamp duty purposes especially if buying at a discount. The OSR will be after their pound of flesh and will expect you to pay stamp duty on the full value of the property under market conditions not at the transfer value if buying below market value.
Some banks may also lend against the value of the property rather than the purchase price - so if it's been sold at less then market value that could help the borrower (especially if they've got less than a 20% deposit to contribute). Cheers Jamie
A valuation is needed for land transfer to support the price being paid. For duty and CGT, GST etc the market value prevails over any agreed price.
I assume that you mean for the vendor that CGT is based on market value (so if they sell below market, they will still be liable for the full amount of CGT). Conversely Paul, does the purchaser's cost base become the transfer price or the market value?
Scott 1. Yes 2. If its not arms length the cost base may well be determined by market value. That why OSR care nought if you transfer land for $1. They assess duty on its market value.
