Tax Tip 103: Transfers Between Spouses and Stamp Duty in Victoria [NO LONGER VALID]

Thanks Terry. No 1 & 3 can be arranged. Its the No 2 I am confused with and struggling how to demonstrate it....

Does it mean showing monetary consideration with $$ amount in transfer of land form.

 

See above!

 

Thanks Terry for your help .

This supposed to be simple process of one spouse transferring ppor (which has possibility of becoming IP) to the other. All this borrowing, transferring money while it is ppor, has muddy the water rather than clearing it. If its investment property currently i understand the need for all this borrowing and transferring money....any way my opinion

This is mind boggling area and appears after getting specific advise it has created more confusion then solving it. even professionals working in field has two opinions on this..

 

I think it is pretty simple.

Just pretend you are selling to a stranger and take the same steps.

 

I understand that no stamp duty or CGT is payable on the house that is to be transferred to the ex spouse as part of a settlement. If the property is held in a trust with the other ex spouse as director - is this also the case?
Case in question - property is to be transferred from a trust to personal name with personal name taking a mortgage + existing equity in the property.

 

it depends - see legal advice.

 

Spouse transfers where tax issues are involved musts till be settled like any arms length transfer. You cant skips steps just because its a related party. You cannot deem a acquisition because a contract says so. If borrowed $ are used then the borrowed funds must be settled by being 1. borrowed and then 2. Paid to the vendor as part of the consideration supporting the market value which may likely apply. The former borrowings by the vendor may need to be partially or fully discharged too.

All reasons why sound legal advice is given and maintained so no steps are missed

 

Placed by error in topic: tax-tip-50-minimising-duty-on-spousal-transfers.4579)

Quick question regarding adding a 2nd name to an investment (once PPOR) property.

In partners name as purchaser, but both our names listed through bank finance. Currently Valued (RP) between: $405k / (avg: $467.5k) / $530k.

I read all comments, saying it's free stamp duty in Vic. Which only sounds/reads like it's for a sell from one owner the the next (not joint owners).

My question is how does one work out the other legal things involved, like CGT?

Was told by our tax advisor last year it could be a good idea to have both listed for tax reasons. But the cost to add my name could be high.

Also, forclosing and opening up a new bank loan, would it be even worth it to go through all the broker hoops again?

 

You will need specific advice. Transfer will be a CGT and that may mean CGT is payable unless an exemption applies.

Loans would need to be paid out and mortgages discharge and new loans entered into.

Many other legal issues to consider too

 

Get in quick. This exemption is being wittled back.

See Vic Government removing stamp duty exemption between spouses for investors from 1 July

 

This exemption no longer applies in Victoria as per my opening post. The law has been changed.

See
Tax Tip 161: The new Duty on Spousal Transfers in VIC Tax Tip 161: The new Duty on Spousal Transfers in VIC

 

Monetary seems likely to take on its ordinary meaning...a monetary consideration appears to address consideration based on value of money. Eg barter based on currency, capable of conversion to money etc. Bitcoin even

 

I am still seeing a lot of people who don't seem to know about the law change on transfers between spouses in VIC. Beware!

 

The revised Vic law is intended to only provide a "gift" of property is exempt from duty between spouses. It makes transfers where the property in intended to address tax benefits a problem v the old law (5+ years ago ?) . eg One spouse cant sell to another to refresh the costbase or to refinance etc. The gifting is problematic for the settlement and future deductibility. Of course, you can still transfer through sale at market value and pay proportional duty and its not a concern.

The NSW exemption is far more friendly and allows a transfer for consideration while it is the PPOR without duty but with one limit. It only allows ONE spouse to transfer 50% of the full ownership to the other while they occupy the property as their principal place of residence. The following day they vacate and can rent it with aenhanced loan. There is even scope in that strategy to debt recycle to buy a new home.

 

Just a reminder of the law change. Still people are unaware.

 

Yes it can be dangerous when people open old threads like this one from 2016 and dont read the most recent posts. It may be a thread that should be closed ?

 

Thanks Simon