Stamp duty exemption when buying property under lease?

Discussion in 'Loans & Mortgage Brokers' started by nushydude, 26th Aug, 2017.

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  1. nushydude

    nushydude Well-Known Member

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    Hi,

    If you are a first home buyer in VIC, you are exempt from stamp duty for properties valued 600k or less, if you live there as your PPOR for a year.

    How does it apply if you buy a property that is currently under a fixed term lease? No stamp duty exemption in that situation or is there a different condition? For example, it would still be OK if the fixed term is not renewed and the new owner lived from the date of ending the existing lease for a year at the new property.

    Any information about this?
     
    nushydude, 26th Aug, 2017
    #1
  2. wylie

    wylie Moderator Staff Member

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    wylie, 27th Aug, 2017
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  3. nushydude

    nushydude Well-Known Member

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    @wylie
    The bottom line is that I should check it will a solicitor?
     
    nushydude, 27th Aug, 2017
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  4. wylie

    wylie Moderator Staff Member

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    I would check it with the government department that rules over this area. In Queensland that is Office of State Revenue. Ring up anonymously. But beware that I've had other questions and been given incorrect information (according to our lawyer).

    This was a question of "when" we settle close to 30 June - and the possibility of still being hit with land tax (who owns a house on 30 June cops the land tax and having settled before then "should" mean we don't pay, but we were told by OSR it wasn't this clear cut and depends on when the title changes, which might not be before 30 June). This sounds like it should be straight forward, but I was given confusing information by OSR.

    So, I'd ask them first, and then check it with your lawyer.
     
    wylie, 27th Aug, 2017
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  5. nushydude

    nushydude Well-Known Member

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    The bottom that would be State Revenue Office Victoria. Awesome. I'll call them first thing tomorrow morning.
     
    nushydude, 27th Aug, 2017
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  6. Joynz

    Joynz Well-Known Member

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    This is what the SRO Victoria website says:

    3.Residency requirement
    At least one purchaser must use the home as a principal place of residence (their home) for a continuous period of 12 months, starting within 12 months of becoming entitled to possession of the purchased property (this normally occurs at settlement).

    2017 first-home buyer duty exemption or concession FAQs | State Revenue Office
     
    Joynz, 27th Aug, 2017
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  7. nushydude

    nushydude Well-Known Member

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    @Joynz

    Aha! I read it but somehow missed the part it says "starting within 12 months of becoming entitled...". So we are all good, right?
     
    nushydude, 27th Aug, 2017
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  8. Joynz

    Joynz Well-Known Member

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    You need to make very sure that you give the tenants the correct notice, in the correct form, before the end of their lease so you can move in as required within 12 months.
     
    Joynz, 27th Aug, 2017
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  9. nushydude

    nushydude Well-Known Member

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    Got it mate. Thanks
     
    nushydude, 27th Aug, 2017
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  10. Terry_w

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

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    Just look at the legislation. It would be in the duties act vic
     
    Terry_w, 27th Aug, 2017
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  11. Peter_Tersteeg

    Peter_Tersteeg Mortgage Broker Business Member

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    You can purchase a property with an existing tenant in Victoria and still be eligible for the stamp duty waiver. Within 12 months of purchase you're expected to remove the tenant and move into the property yourself.
     
    Peter_Tersteeg, 27th Aug, 2017
    #11
  12. Corey Batt

    Corey Batt Well-Known Member

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    Thankfully State government's have been pretty good in this regard, giving a grace period for when you can move in. (usually 6-12 months)

    Make sure you find out the required minimum notice/lease conditions so that you can actually remove the tenants in that time - last thing you want to do is be forced into a position where you're non compliant with the legislation and have to pay back any benefits + further penalties.
     
    Corey Batt, 28th Aug, 2017
    #12