Selling PPOR, Buyer wants to declare lower value.

This seems advantegous.... forgetting the type of people who launder money may not let you keep your knees or thumbs.

 

@Terry_w what are the implications for the $150K not be part of the property purchase but for say furniture and sundries where it could be documented in a contract

 

cash is king

 

Stamp duty would still be the same. Still got the money laundering aspects to consider - nothing really changes/

 

Money launderers will be jailed, judge warns | theage.com.au

 

You said it earlier Terry. Laundering. No doubt. I bet anything they have a small business.

 

Also consider this, what are you gonna do with that 150k? Buy another property? Forget it. Put it in the bank? Forget it. Unless you do the same thing as the buyer is doing (illegal) you have very little legal avenues to park this money.

EDIT- Sorry @Terry_w just realized you already covered this. 100% Agree.

 

If he's buying as an investment and decides to sell they'll be paying a lot more in CGT.

 

Dodgy with trouble written all over it. Don't do it.

 

There are really only two reasons I can think of them wanting to do this...

The first is for a first home buyer to get under the thresholds, it makes a lot of sense for them to pay cash on the side and take advantage of all those bonuses... only way to be able to even slightly legitimise this would be them paying you for services on the house or something, in which case you'd need to register for GST and then declare it as income and pay tax (and do some kind of services...), effectively you'd lose 10% to GST and then whatever your marginal rate is as well. It would still be ultra dodgy even with that and you'd lose half the cash to tax give or take.

The second is money laundering as covered in other posts which is 100% illegal and carries pretty significant penalties with it.

Either way the question is really what are you getting out of it? The first above is still more likely illegal than legal and you lose half the money and the second is 100% illegal and you don't gain on it at all either, you're not paying CGT on your main residence anyway and you're not going to save enough in commission to justify the cost anyway if it's outside the agent.

Just not worth it no matter what, no way I'd even be thinking about doing it.

 

Thanks for all of the replies!

Yes they are small business owners. No beards on either side.

We have instructed the agent to renegotiate the offer so it's all above board.

 

I knew it.
It was either going to be that, or some kind of illegal business....or both.

 

Interesting article I know people who take money out of Australia in large amounts but nothing criminal about it they just don't declare

 

Do you know where they live? They probably have stock piles of cash lying around.

 

Yes, but then I'd have to grow a beard.

 

100% dodgy!

 

A business that has that much cash and not declaring it is doing something illegal anyway. What's the difference between them and bikies? Report them.

 

You do...the look now is to have a man bun and ned kelly beard. Get with the "fashion".

 

I say accept the offer, take cash beforehand. Don't sign contract fully or sign in such a way that it is not acceptable.
Book tickets to travel around the world for a year. Enjoy your vacation.
Return hoping the buyer isn't still lurking around.

PS: I am only joking