My husband and I purchased a block of land in Melbourne with my mother in law as a tenancy in common with a 70/30% split with the intention of developing the block to create a PPR for both of us. We have now done that and the council has just signed off on the subdivision of the development and the two properties can be titled separately. I have a question regarding the stamp duty that will be payable once we do this. I have used nice round numbers for illustration purposes . If the block was purchased for $600,000, and Unit 1 is now worth $600,000 and Unit 2 is now worth $400,000 this makes the total value of the block $1,000,000. This means that the actual value share of the property is now 60/40% rather than the current 70/30%. My understanding is that a 10% transfer of value would need to occur based on the current property value ($1,000,000*0.10=$100,000). Therefore, the stamp duty would be calculated based on the $100,000 value transferred ($350+0.024*$75,000=$2,150). Is this logic correct; or have I missed something? This is not our area of expertise so any advice is appreciated.
Tax Tip 236: Stamp duty and Partition of Land in VIC after settlement Tax Tip 236: Stamp duty and Partition of Land in VIC after settlement
