Can i transfer property to a friend in order to be able to get borrowing capacity ?

Discussion in 'Legal Issues' started by Geekyebony, 22nd Apr, 2019.

Join Australia's most dynamic and respected property investment community
  1. Geekyebony

    Geekyebony Active Member

    Joined:
    12th Nov, 2017
    Posts:
    30
    Location:
    Melbourne
    Hi Guys,

    I have what you may consider to be a rookie question but that's just because i am a rookie in this field and will need advise on next steps to take. I and my wife own a PPOR as well as a piece of land that is already titled and settled and we have placed a deposit towards another piece of land that will title in about 2-3 months. The big concern now is that it doesn't look like we will be able to meet the borrowing requirements to settle on the new piece of land and it was an unconditional contract which means if we cant settle, we will lose our deposit of almost 30k.
    My question is that, can we possible transfer the piece of land that is already titled and settled to a friend or business partner temporarily so that it will only be our PPOR that will be our mortgage liability while we try to settle on the new land. Then once we settle on the new land etc, we can then get our settled land transferred back to us. I know all of this may sound incorrect but essentially what i am after is how can we keep both our PPOR and the settled land and still proceed to settle on this new land without having to give up one to meet borrowing requirements. I want to find out if there is a way legally to get this done.
     
  2. Terry_w

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

    Joined:
    18th Jun, 2015
    Posts:
    41,666
    Location:
    Australia wide
    Yes.
    Your friend could be bare trustee for you to avoid stamp duty being levied 3 times.
    See my strategy tip on this. Link in sig
    Get some legal advice.
     
  3. Geekyebony

    Geekyebony Active Member

    Joined:
    12th Nov, 2017
    Posts:
    30
    Location:
    Melbourne
    Thanks Terry_w. I will go through the relevant strategy in your link. are there any other possible options ?
     
  4. Gockie

    Gockie Life is good ☺️ Premium Member

    Joined:
    18th Jun, 2015
    Posts:
    14,735
    Location:
    Sydney
    What a tip!
     
    Scott No Mates likes this.
  5. Scott No Mates

    Scott No Mates Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    27,094
    Location:
    Sydney or NSW or Australia
    There are a few options available:
    • increase your income
    • pay out your current loans
    • sell one of your other properties/refinance
    • get someone to go guarantor
    • get divorced and a support payment from your ex
    • receive an inheritance
    • die and claim your insurance
    • sell an organ
    • sue someone for damages in the hope for early settlement
    • borrow from a higher risk/non-APRA lender
    • take out LMI if you are able
    • learn an instrument and start busking
    • seek legal advice & cut your losses
     
    marty998 and money like this.
  6. marty998

    marty998 Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    627
    Location:
    Sydney
    I am a rank amateur at this game but isn't the bolded one just a tad drastic?
     
  7. mehrar_84

    mehrar_84 Well-Known Member

    Joined:
    29th Jan, 2019
    Posts:
    118
    Location:
    Melbourne
    What is tip number?
     
  8. jprops

    jprops Well-Known Member

    Joined:
    24th Sep, 2015
    Posts:
    885
    Location:
    Sydney
    How does he dispose of the loan?
     
  9. Terry_w

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

    Joined:
    18th Jun, 2015
    Posts:
    41,666
    Location:
    Australia wide
    any loan would need to be taken on by the friend. Would need to be a good friend.
     
    jprops likes this.
  10. Terry_w

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

    Joined:
    18th Jun, 2015
    Posts:
    41,666
    Location:
    Australia wide
    I had a look at my list, but I don't think I have actually posted it yet, but probably have written one as a draft. Will try to find it.
     

Buy Property Interstate WITHOUT Dropping $15k On Buyers Agents Each Time! Helping People Achieve PASSIVE INCOME Using Our Unique Data-Driven System, So You Can Confidently Buy Top 5% Growth & Cashflow Property, Anywhere In Australia