Spousal Transfer NSW

Discussion in 'Accounting & Tax' started by Heinrich, 7th Aug, 2017.

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  1. Heinrich

    Heinrich Member

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    Have a question for some of the experts in this forum.

    Re spousal transfer of PPOR, I find the following in the NSW OSR website:
    ''Transfers between married couples and de facto partners
    An exemption from duty may apply where a transfer of residential land is between a married couple or de facto partners and the property being transferred is either:

    • the family home (principal place of residence), or
    • vacant land which is intended to be used as the site of the family home.''
    What I understood from the above is that a couple holding the PPOR as joint tenant will be able to take one person's name off the title without incurring stamp duty, ie, A and B joint tenant, A transfers/gifts his/her portion to B, and B ends up being the sole owner in the title.
    However, upon a telephone enquiry, OSR advises me that this particular case will attract stamp duty, albeit for the half of the value of the property at the time of transfer.

    Is this your understanding or something got lost in translation, as I could have got my wires crossed while explaining to the OSR person.

    (Long time browser, first time poster, so was not sure if this calls for a separate threat.)
     
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  2. Terry_w

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

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  3. Paul@PAS

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

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    The NSW spouse transfer exemption / concession works in the reverse. If ONE person owns the property AND it is occupied as their main residence then a transfer of 50% to their spouse as either TIC or JT will be exempt from duty.

    All other instances may be dutiable (eg a transfer from two to one). Unless another exemption applies eg marital split and court orders
     
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  4. Heinrich

    Heinrich Member

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    Thanks guys for your thoughts.
     
  5. San2018

    San2018 Well-Known Member

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    Just looking at spousal transfer in NSW at the moment . Can someone guide the duration it takes to transfer and the complexity please.
     
  6. Terry_w

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

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    could be done in a few hours to a few weeks. From simple to complex depending on the circumstances.
     
  7. San2018

    San2018 Well-Known Member

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    Thaks Terry, I think it's straightforward but possibility can comment.

    Current PPOR is only on my name and planning to transfer 50% of share into wife's name.
     
  8. Terry_w

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

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    Is there a loan? Will she borrow to buy you out? If so best to allow for one month
     
  9. San2018

    San2018 Well-Known Member

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    Yes, i have a loan.

    I didn't think about the finance part. We have common finances. Does it mean that I need to include her name to mortgage first and then apply for spousal transfer?

    Could you pls advise the steps what needs to be done.
     
  10. Terry_w

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

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    Step 1. get legal, tax and credit advice

    You will be transferring title so you have to decide how to document this, consideration for the transfer, discharge of mortgage, application for new loan, working out how much to pay the old loan, how to structure the loans, names on loans etc
     
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  11. Paul@PAS

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

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    A change of ownership without resettling the loan may result in a substantial impact on tax deductions.

    eg Loan is to Mary and Mary owns the property. She transfers half to Fred. Half her loan interest is non-deductible. And after the title transfer has occurred this may be incapable of being fixed.
     
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  12. San2018

    San2018 Well-Known Member

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    Thanks Paul.

    So I need to resettle the loan first on both names and then apply for spousal transfer?
     
  13. Terry_w

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

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    Nope. One has to buy out the other.
     
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  14. Paul@PAS

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

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    It all needs to be co-ordinated. Not unlike selling to anyone else. Solicitor contract, settlement and refinance. Elements can be simplified and accelerated (no settlement adjustments, timing etc) but it typically is like any other sale albeit the duty. And just one lawyer not two.
     
  15. Terry_w

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

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    Liltwain, San2018 and Paul@PAS like this.
  16. San2018

    San2018 Well-Known Member

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    Thanks Terry, I am watching the thread.
     

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