Victorian Stamp Duty for adding partners name to investment ownership

I've been doing basic searches on how much it may cost in stamp duty ($26k+) to change ownership for one of our properties from 100% (1 owner) to 50% - 50% (2 owners).

Currently the Vic government has a discount for stamp duty. Anywhere between 25% / 50% and 100% discount. (1st home owner).

Is there an easy way to work out if we apply for either 25% or 100% (screen shot details reason: "transfer to spouse / partners")?

Property value could currently be: $445k (low), $520k (med) or $594k (high).

We are unlikely to change ownership percentage, but with the current discount on offer, we could get more bang for our assests in the future (50% at tax time as joint owners, tax charged, rental deductions). Ie: easier as everything will be 50/50.

 

Also, would Stamp duty go by council values?

ie: Site Value / Capital inproved value?

 

If you are transferring 50% from yourself to your partner, your stamp duty estimate is wrong.

 

it would be based on the value of the transfer.

Note that you should not just change ownership as this will affect deductions going forward and it will trigger a CGT event as well. get some legal and tax advice.

 

the SRO will want to see a valuation to work out duty on a related party transfer.

 

So it won't be worth adding a 2nd persons name to the ownership (not buying / selling for $250k, just adding a name for $0.00 + stamp duty)?

I would assume deductions going forward would be split between the 2 of us (after transfer / additional name), so everything tax related is divided for easier tax claiming.

CGT would only occur if / when property is sold to another investor / ppor owner?

Another screen shot of how I'm doing the 2021 tax year. I've set up 2 different spreadsheets (PPOR exempt from mumbo jumbo tax information ).

Good enough for tax agent reasons (this is on top of our annual agent statements / tax receipts (paid by credit card) and other bills (rates / water)?

 

Not sure what you are basing things on, but a change of ownership is aa CGT event.
Adding a spouse triggers CGT. This is the same whether there is money exchanged or not.

Going forward you can claim 50% each of expenses (if 50/50 owners) but only to the extent that these expenses relate to the property.

If your loan was $100,000 and you added a spouse to the title as a 50% owner, and there was no purchase,. then going forward you could only claim interest on $50,000. This is because you have disposed on 50% of the property. Your spouse cannot claim any interest as they didn't borrow to buy their share of the property.

So by doing all of this without advice you would end up in a much worse situation potentially.

 

Has the loan been paid off?
Even if it has, net taxable income is about 8k. If you transfer 50% to your partner, you end up with 4k each.

What's the advantage you expect to get from this?

 

Where we might be different to other investors: Both our names are on all mortgages (ppor & investments), including the rental property that is 100% in her name (once a ppor).

All expenses would relate to the 1 property as listed on the spreadsheet. There is less then $43k owing on our (my name is on loan) 100% investment loan for her sole ownership property.

If it is more simple to have it still in 1 name, we wouldn't change anything. I just like looking outside the banking / investment box on ways that could make things even easier.

Ie: Bank approvals for future investments, simple tax returns, if / when someone passes.

 

You are confusing loans and mortgages. Only an owner can give a mortgage, but you might both be borrowers. But this does not lead you to being able to do what you propose.
You would need to consider whether to sell a percentage of the property to the spouse and if so how to transact for this.

what are you trying to achieve? It is likely to be a very expensive exercise.

 

I'm trying to achieve joint ownership (50/50) of my partners old PPOR, which was turned into an investment property when we both moved into our current PPOR.

Nothing else is changing, except for a 2nd name on the land titles certificate.

Banks already include me in all debts, as my name is listed in the property debt (loan, mortgage...).

All I know is a bank owns an investment property that has 2 names on it: My partners name (owns 100% of property) and my name (owns 0.00% of nothing).

I don't understand how it is totally expensive without any explaining.

- Stamp duty currently upto $7k (with 25% discount).
- Selling tax (CGT): When property is eventually sold to another owner and a profit is made.

(Would it be 50-50 taxed between us, or would partner be required to pay cgt once my name is added to the title, even though she still owns 50% of property?, then once the property is actually sold to someone else, we both pay a share of CGT again?).

Other then what I read on sites including government ones, I don't know what should be occuring.

 

if you transfer title it will trigger CGT at the point in which you add yourself to title, and when you sell. Your spouse would be taxed on this. There may be some degree of an exemption available depending on when you became spouses.

Unless you borrow to buy out the spouse's 50% only 50% of any existing loan would be deductible.

Go and get some legal advice before doing this as it seems it is going over your head.

 

You may not think of it as a sale, but the tax office and osr do.

still dont understand why you are doing it though.

Saying you want to achieve joint ownership isn't a reason.

 

Can you please explain to me the reasons it should or shouldn't occur (other then CGT issues!).

I didn't actually say we will be doing anything, as per my original question: "We are unlikely to change ownership percentage".

Other then obtaining professional advice (which I thought I would try here first!) and looking at websites including government sites, I have stated the reason(s) we could be interested in doing this.

If it's not suitable (don't waste your time and money on something that will be worthless), that would / should be the end of it.

As per my comment in reply 9, it seems it would just be easier to leave things the way they currently are.

"If it is more simple to have it still in 1 name, we wouldn't change anything."

Seriously folks, no need going round in circles. it is either better or worse to add a 2nd name.

Thanks for everyone's replies though.

 

It is not as straight forward as that.

Being a non-owner it is probably in your best interest to receive a gift. but it could also be better to leave things as is. We know nothing about your family situation. You need to consider the estate planning aspects on death and incapacity - of either of you.

You also have to consider the asset protection issues on bankrutcy, family law, death and incapacity.

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