Title transfer before subdivision

Discussion in 'Accounting & Tax' started by H0mer, 1st Feb, 2020.

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  1. H0mer

    H0mer New Member

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    I am looking to do a knock down and subdivide of current primary residence. Then build a new primary residence and investment property retaining both.

    Currently the title is in joint names and my accountant has suggested transferring property into my name only before we start and that doing so will be stamp duty exempt (SA) as I have majority income.

    Is this correct advice?
     
  2. Terry_w

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

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    Do you you is it good advice?

    Probably not.
     
  3. H0mer

    H0mer New Member

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    Thanks Terry, I'm unsure could you explain?. If this is a bad idea I will start looking for a new accountant.
     
  4. Terry_w

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

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    Your accountant giving legal advice by advising on stamp duty for starters. You would need new loans. You would end up owning both properties solely so what about the estate planning aspects, the land tax aspects, ability to get finance now and the future, the tax consequences of the CGT exemption, what happens when the property becomes cash flow positive etc.

    Was it just an off the cuff comment or paid for advice?

    There is a lot to consider besides the commonwealth taxes which is the only area a tax agent can advise on.
     
  5. H0mer

    H0mer New Member

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    Ok thanks. Yes paid and have discussed these other considerations. I will look at legal advice also.
     
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  6. Terry_w

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

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    Good idea. It might be worth considering transferring but you need proper advice. Also consider deductibility of interest
     
  7. Mike A

    Mike A Well-Known Member

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    You are aware as well you wont get the main residence (Or any part exemption) on the block you build your investment property on if you ever sell in future