NSW Stamp Duty - Additional Duty payable if 2 properties bought in 1 year

Where in the process of buying two units in Rockdale and ive just been talking to my solicitor who has mentioned an "aggregation of stamp duty" clause for stamp duty.

If you purchase two properties within 12 months, you will be assessed as one amount for stamp Duty. Originally stamp duty was going to be 10,340 (330k) & 15200 (438k), but it is now going to be 28,700 (about $3100 more).

Has anyone been struck down with this before?

Just for future intrests: This only applies when the purchaser & vendor are the same (or associated) for both transactions. So because we are buying off the same developer thats how where getting stung.
 
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If I'm reading the legislation right, the transferor (seller) and the transferee (buyer) have to be the SAME? i.e. this would apply where, for example, you buy half a house from the vendor now, and the other half in 6 months. You'll be charged stamp as if it was one transaction.

If I buy a house from Vendor A this month and another, totally separate house from Vendor B in 6 months, then this rule doesn't apply because the transferrors are different and it sure isn't "what is, substantially, one arrangement relating to all of the items or parts of, or interests in, the dutiable property".

In your case, I would argue that you are buying separate properties, and that the two units, being separate strata titles, would not be 'parts of one dutiable property'. But I'm not a lawyer......
Alex
 
Its called highway robbery:(

Yes im thinking exactly that.

We were re thinking of structuring it so one property held in individuals and one held in a unit trust however as the units would be held by the individual who bought the property then it gets caught under the associates ruling.

Would love to hear if anyone has managed to get around this some how....
 
In your case, I would argue that you are buying separate properties, and that the two units, being separate strata titles, would not be 'parts of one dutiable property'. But I'm not a lawyer......
Alex


Yeah i was just adding that as you were replying. I understand why the law is there for the reason you stated but if your buying different lots then it shouldnt matter... But as you said its something for my lawyer to thrash out.

Imagine the people who buy from the same develpor (like landcom, mirvac etc) in seperate estates in totally different parts of the states it still gets combined. Really common sense should over ride this.
 
Imagine the people who buy from the same develpor (like landcom, mirvac etc) in seperate estates in totally different parts of the states it still gets combined. Really common sense should over ride this.

I'm pretty sure in those cases the vendors would be different legal entities.
Alex
 
Go to another solicitor who can argue that its a separate and unrelated transaction. I know a solicitor who did this for a friend and it saved in $12K. But will never know whether OSR will catch up on him later. The reason cited by that friend were (not totally accurate as it was only through casual conversation): even though the vendor & purchaser was the same, different contract date, different settlement date, different location, different purpose etc...

If the transaction had:

- different vendors
- different purchasers (bought in husband/wife name/company)
- different settlement periods
- bought through different real estate agency
- different location
- the properties are not adjacent
- the properties were bought for different purposes ( eg PPOR & IP etc)
- circumstances surround the purchase

How could it be related transaction if some/all of above factors are different.

It could only be argued if you bought the different properties owned by the same vendor, on the same day, through same real estate agent, because this would show that you had an intention to use the property for the same purpose.

If you turned upto an auction one night and bought a property on the spur of the moment, and the week after to another auction and bought one, and later realised that the owners of the propety were same, I can't see how this could be seen as related transactions. This would be really unfair to the purchaser.

May be ask the real estate agent who know a solicitor who can get around this problem.
 
Invest elsewhere

Yes im thinking exactly that.

We were re thinking of structuring it so one property held in individuals and one held in a unit trust however as the units would be held by the individual who bought the property then it gets caught under the associates ruling.

Would love to hear if anyone has managed to get around this some how....

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Your best approach is to purchase property in the NT as they have no land tax to date. If my memory serves me NSW also charges you land tax that you hold in other states? so your best bet is through a discretionary trust.

It would be nice if you could write the NSW state revenue office and tell them because of their userous land tax charges you will enrich another state with your investment funds but this will only attract the revenue dogs. The stupidity of the NSW government will eventually impact on those that they profess to look after, the poor and the disadvantaged.
 
Your best approach is to purchase property in the NT as they have no land tax to date. If my memory serves me NSW also charges you land tax that you hold in other states? so your best bet is through a discretionary trust.

Land tax is a state tax only. Each state only levies land tax on land in that state.
Alex
 
State land tax

Land tax is a state tax only. Each state only levies land tax on land in that state.
Alex

Hi Alex perhaps it was a proposal that was being examined but I do remember that NSW was looking at aggregating all property any resident owned in their individual name or a unit trust regardless of where it was in australia:eek:
 
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