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Stamp Duty

Discussion in 'General Investing Discussion' started by Julieannetherese, 29th Sep, 2013.

  1. Julieannetherese

    Julieannetherese New Member

    Joined:
    29th Sep, 2013
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    Location:
    Central Coast, NSW
    Hi, I am new to this site and not too knowledgeable about investment. My husband and I are buying a unit for our son to live in. He will pay us rent to cover part of the mortgage repayments but he is not in a position at present to pay a mortgage or get approval on his own. So we are borrowing the money. Is it possible to put the property in his name so we can avoid Stamp Duty. He has never owned anything as has always been a low income earner. Thanks for any advice.
     
  2. Terryw

    Terryw Well-Known Member

    Joined:
    9th Jun, 2006
    Posts:
    653
    Location:
    Sydney
    You should seek legal and tax advice about this as there are several issues which you may not be aware.

    E.g. If you buy in your names then the property may be subject to CGT whereas in his name it could be exempt as his main residence.

    If you buy in his name he would still have to pay stamp duty now on the purchase.

    If you are thinking of buying in your name now and transfer later then stamp duty on the transfer and CGT as well.
     
  3. Terryw

    Terryw Well-Known Member

    Joined:
    9th Jun, 2006
    Posts:
    653
    Location:
    Sydney
    And talk to a broker as it may be possible to buy in his name with you the parents as guarantors.
     
  4. GregR

    GregR Reid Consultants

    Joined:
    13th Jul, 2009
    Posts:
    273
    Location:
    Berwick Vic
    You may need to buy in your own names or at least your name/s and his as well (tenants in common) if you are looking to obtain finance that is secured by this property. With the NCCP Act, most lenders no longer allow service guarantors.

    An option may be to refinance your existing home to obtain a finance facility that you can then use to buy your son a property. In that way it will get around the service guarantee issue and the property could be purchased in your son's name and you become the lender. You should seek legal advice if you are going down this path to ensure your own rights of recovery.

    Good luck with it.
    Greg.