Finance & Stamp Duty

[WebBoard]

From: Steve Hadfield


As a new investor and having recently discovered this forum, I am amazed by the wealth of knowledge and information available here.

Thankyou for the information you all continue to provide which so greatly assists new investors such as myself.

Can anyone assist with providing the following information:

* Is stamp duty in NSW payable before settlement of the property? If so, when should it be paid?

* If I purchase a property (borrowing 80% of purchase price), and then immediately sell, can I then enter another transaction immediately on the exchange of contracts on the first deal. What I am trying to say is, does the exchange of contracts free up my equity again and allow me to enter into a new purchase. Will banks lend on another deal knowing that I have an exchange completed on a previous deal, or do I need to wait for settlement of the first property.

I don't know that I asked this question very well, but I hope I can be understood.

Thanks.

Steve H.
[email protected]

 

[paulzag]

Reply: 1
From: Paul Zagoridis


Adding to what Martin said to your No Topic post...

In NSW Stamp Duty must be paid within 3 months of exchange. So keep it in mind if you have a delayed settlement.

I don't think I understand your 80% financing example.

The bank will commit funds on settlement. That's when they get the unencumbered deed. If you sell before settlement, pay Stamp Duty and legals, pocket any profit and look to do it again.

You can use cash, deposit bonds, your kid sister or a peppercorn as a deposit on exchange (as long as the contract reflects it).

Paul Zag
Dreamspinner
Oz Film Biz is at
http://www.healey.com.au/~paulz