Buying out defacto partner share of mortgage in Qld

I have read a few posts regarding this but cannot find one that answers all my Q's in relation to Qld so hope there are some folks who can offer advice.

My defacto partner and I have split and share a mortgage on 1 x PPOR. We have cheerfully agreed on a figure of $50k for me to buy out her share of the mortgage and I would refinance a new loan into my name. I have seen a MB and should be no problem on finance front. There are no children involved.

My questions are:

1. Is there some sort of consent order/agreement that can be drawn up to formalise this (and importantly avoid the evil Stamp Duty)? My MB said we need to document an agreement with a solicitor so the lender can discharge the mortgage and refinance in my name.

2. I read somewhere that consent orders apply only to couples with children so not applicable in our case?

3. Does anyone know what kind of costs are involved in an agreement (or whatever it is called) made with a solicitor, compared with stamp duty cost
(stamp duty will be around $3675).

4. If we manage to avoid duty, is CGT payable by my partner on the $50k we have agreed she will receive?

5. Anyone know a good solicitor in Brisbane Bayside who does this kind of thing well?

All advice gratefully received. (We will be seeing a solicitor BTW but would be good to have some background as the ones I have called so far won't tell me anything beyond 'come in for a consultation' - all very cloak and dagger :)

Regards, Col
 
I have read a few posts regarding this but cannot find one that answers all my Q's in relation to Qld so hope there are some folks who can offer advice.

My defacto partner and I have split and share a mortgage on 1 x PPOR. We have cheerfully agreed on a figure of $50k for me to buy out her share of the mortgage and I would refinance a new loan into my name. I have seen a MB and should be no problem on finance front. There are no children involved.

My questions are:

1. Is there some sort of consent order/agreement that can be drawn up to formalise this (and importantly avoid the evil Stamp Duty)? Yes My MB said we need to document an agreement with a solicitor so the lender can discharge the mortgage and refinance in my name. There needs to be an agreement

2. I read somewhere that consent orders apply only to couples with children so not applicable in our case?Consent orders are common in all kinds of court matters

3. Does anyone know what kind of costs are involved in an agreement (or whatever it is called) made with a solicitor, compared with stamp duty cost
(stamp duty will be around $3675). You will have legal fees any way so your real question is will legal fees on a transfer plus stamp duty be lower than preparing an agreement and transferring

4. If we manage to avoid duty, is CGT payable by my partner on the $50k we have agreed she will receive?No, if an appropriate agreement is drawn up. Depending on situation as it is a PPOR possibly no CGT anyway

5. Anyone know a good solicitor in Brisbane Bayside who does this kind of thing well?

All advice gratefully received. (We will be seeing a solicitor BTW but would be good to have some background as the ones I have called so far won't tell me anything beyond 'come in for a consultation' - all very cloak and dagger :)Try a community legal aid centre if private fees seem excessive. A solicitor should be able to give you a fairly accurate ballpark figure of costs based on the scenario you have outlined

Regards, Col

The advantage of an agreement is it should finalise all financial matters between you, possibly some you haven't thought of such as if there are jointly operated credit cards, harvey norman lines of credit etc
 
We recently had a fencing issue, and went along to get some free advice from the Caxton Legal Centre. I think they have free advice nights on Monday, Tuesday and Thursday evenings, but call to check first.

It could be a good place to get some initial advice before taking it further.
 
Thanks for the advice

Thanks for the good advice jrc. You have answered my main queries. We will be getting an agreement from a solicitor to avoid the stamp duty and prevent any future claims.

Assuming that this will be cheaper than paying the $4k duty.

No other financial interests/loans or accounts together besides the mortage so should be fairly straightforward I would think.

Thanks for the tip Wylie. The Caxton legal service do a great job down there. It didn't occur to me to contact them.

Col
 
COLJP,

Depending on how the relationship is ending you might not need to refinance with the bank but simple just remove her name from the title and keep the loan as it is if the agreement is mutual without any costs. This could be done in Vic so don't know if it applies to QLD or can still be done in Vic.
 
Hi Y33

Removing a borrower is OK, but the remaining borrower must requalify for the mortgage loan.

What often happens is that the remaining borrower cannot service the loan by themselves, so Col should make enquiries with his broker / lender before making any final decisions. No good ''deciding' to do something and then finding out that you can't - it can test everyone's patience to have to have the discussions all over again.

The mortgage is a loan to specific people or entities. The loan facility cannot just be passed along or assigned. Any material change will most likely have to go back through the whole credit process again, although most lenders would not consider a change of borrower to be a 'break' so this may avoid break costs - but it may be considered a new loan with fresh mortgage insurance.

The Love & Devotion clauses are designed to avoid imposing hardship by way of Stamp Duty costs on domestic couples coming together or moving apart.

Good Luck, Col, breaking up is hard to do. Hope it all goes well for you both.

Cheers
Kristine
 
The Love & Devotion clauses are designed to avoid imposing hardship by way of Stamp Duty costs on domestic couples coming together or moving apart.

I'm not aware of any Love & Devotion clauses in Qld where there is an avoidance of stamp duty upon the divesting of interest in a property (unlike, say, Victoria).

Section 151 of the Duties Act states:
Exemption—particular residences
Transfer duty is not imposed on a dutiable transaction that is
the transfer, or agreement for the transfer, by way of gift, from
1 party to a subsisting marriage or de facto relationship to the
other party to the marriage or de facto relationship, of an
interest in residential land if—
(a) after the transfer, the residential land will be owned by
the parties as joint tenants or tenants in common in
equal shares; and
(b) the residence will be the principal residence of the
parties.

This clearly covers the transfer of a spouse onto the title of a PPOR, but I haven't seen anything covering the removal of a spouse from a title without incurring stamp duty. I'm no lawyer, so I'd happily be corrected if I'm wrong.
 
Buying out ex- De-Facto in Qld Here's how it worked out

Thanks very much for all the advice. Here's how it all worked out so hopefully it will answer other's questions down the track.

We agreed on a sum for me to buy out her share of property. Solicitor daws up 'Defacto Separation Agreement' - Family Law Act Section 90UD

Transfer Form 1 goes to Qld Land Registry - This exempts from Stamp Duty on the transfer based on Separation Agreement.

Refinance done on loan. All good. Thanks to everyone for all the good advice. Much appreciated. Regards, Col.
 
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