Stamp duty when subdividing joint owned property

Discussion in 'Accounting & Tax' started by Tunners, 8th Feb, 2017.

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

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

    Joined:
    18th Jun, 2015
    Posts:
    41,668
    Location:
    Australia wide
    Thats better, but the ATO disagree. I am not sure the ATO argument is correct though, but there is one private ruling where they denied the interest claim where there were 2 owner and one borrowed to increase their share but the other remained a joint owner
     
  2. Paul@PAS

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

    Joined:
    18th Jun, 2015
    Posts:
    23,319
    Location:
    Sydney
    Failing to discharge the old loan mean it is partially or fully non-deductible.

    B will also have a CGT event
    A will pay duty on the 20% change of title
    A will pay for legal title and settlement conveyancing to soliictor or conveyancer

    Its also possible that GST may apply to the transfer. What - No way its just land. Yes that right. If A & B are subdividing with intentions to sell at a future date then its a enterprise. A & B are parties to a enterprise and the transfer from B to A is part of that and you cant separate the two different parties. A isolated profit making intention is a enterprise. And land (not existing residential premises) is a taxable supply. Since the expected value of the transfer is more than $75K its a taxabe supply. BUT....A cant claim a input tax credit on the GST paid. GST wont likely be a factor if intent is to build and hold.
     
    frank22 likes this.
  3. Bahumbug

    Bahumbug New Member

    Joined:
    8th Mar, 2020
    Posts:
    4
    Location:
    Victoria

    @Terry_w Sorry I know this is very old but just wondering why this wouldn't apply in this situation

    Tax Tip 236: Stamp duty and Partition of Land in VIC after settlement
     
  4. Terry_w

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

    Joined:
    18th Jun, 2015
    Posts:
    41,668
    Location:
    Australia wide
  5. Bahumbug

    Bahumbug New Member

    Joined:
    8th Mar, 2020
    Posts:
    4
    Location:
    Victoria
  6. Terry_w

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

    Joined:
    18th Jun, 2015
    Posts:
    41,668
    Location:
    Australia wide
    I have covered this in that tip you referred to. It depends
     
  7. Mike A

    Mike A Well-Known Member

    Joined:
    24th Jun, 2015
    Posts:
    2,656
    Location:
    UNIVERSE
    can also be a problem in Victoria where you have used and/or nominee and the nominee is different to the original purchaser and you have started "land development". Section 32I of the Duties Act 2000
     
  8. Terry_w

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

    Joined:
    18th Jun, 2015
    Posts:
    41,668
    Location:
    Australia wide
    No requirement to use 'and/or nominee' - this is not necessary for a nomination to occur and that section could apply regardless