Double Stamp Duty

Discussion in 'Accounting & Tax' started by Kathy Prounarou, 2nd Sep, 2015.

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

    Kathy Prounarou New Member

    Joined:
    2nd Sep, 2015
    Posts:
    2
    Location:
    Wheelers Hill
    Hi,
    If I purchase a property under my name with an and/or nominee clause and then transfer it to a company where my husband and business partner are directors (50% ownership each), are we liable for double stamp duty. I seem to be getting conflicting advice.
     
    Kathy Prounarou, 2nd Sep, 2015
    #1
  2. MRO

    MRO Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    318
    Location:
    Perth
    What state are you in? (Geographically :))
     
    MRO, 2nd Sep, 2015
    #2
  3. Peter_Tersteeg

    Peter_Tersteeg Mortgage Broker Business Member

    Joined:
    18th Jun, 2015
    Posts:
    8,169
    Location:
    03 9877 3000
    If you're transferring the property to the company after the settlement has already occurred, you'll definitely incur stamp duty.

    If it's before settlement, then it depends on the state the property is in. In Victoria probably not, but get more specific advice from your conveyancer or solicitor.

    Probably not a good idea to buy directly in a company, especially if it's trading. Seek advice on a trust structure instead.
     
    Peter_Tersteeg, 2nd Sep, 2015
    #3
  4. Kathy Prounarou

    Kathy Prounarou New Member

    Joined:
    2nd Sep, 2015
    Posts:
    2
    Location:
    Wheelers Hill
    Thank you for the prompt response. I am based in Victoria. We have purchased the property however have not settled yet. The conveyancer is indicating that we may be charged double stamp duty, whilst the accountants are indicating that we won't be. The company that we are proposing to transfer the property to prior to settlement will have my husband and our business partner as directors. We are looking to develop and sell for profit. Once we develop and sell the property in the future the company will pay the 30% tax. Each family will have their own company with their own family trust and the profits will be split accordingly. We've been advised to have my husband as a director rather than myself as he earns less, however this can be changed prior to settlement if necessary.
     
    Kathy Prounarou, 2nd Sep, 2015
    #4
  5. Peter_Tersteeg

    Peter_Tersteeg Mortgage Broker Business Member

    Joined:
    18th Jun, 2015
    Posts:
    8,169
    Location:
    03 9877 3000
    I'd ask the conveyancer for more information to support their position. A conveyancer would be expected to know the answer to this question, but it does seem odd that you can't execute the nomination clause prior to settlement in Victoria. It might be that the ownership structure isn't already in place?
     
    Peter_Tersteeg, 2nd Sep, 2015
    #5
  6. Paul@PAS

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

    Joined:
    18th Jun, 2015
    Posts:
    23,517
    Location:
    Sydney
    This question indicates two issues.
    1. You should seek legal advice and
    2. You should never seek to change or modify a contract without referring to 1.

    Double duty is real and easy to do. If the entity is not pre-existing at the contract date it can be 100% assured of double duty and double conveyance costs. Its also possible that there could be a further duty issue for a company or trust also. No lender will settle it either. You may be left with no property and a duty issue you cant win. The accountants arent legal advisers.
     
    Paul@PAS, 2nd Sep, 2015
    #6