Purchasing Melbourne Properties Using "OR/AND NOMINEES" Clause

[Kennethkohsg]

Dear All,

1. I will like to find out under the Victorian laws, if the purchasers have bought an unit apartment off-the-plan, using their names and the "or/and Nominess" Clause, and they subsequently wish to assign the sale and purchase contract to another set of new buyers who are relatives during the settlement time,

a. is this legally allowed under the Victorian Housing Laws?

b. would there be some new additional stamp duties payable incurred?

c. is this arrangement considered as a sub-sale or an on-sale arrangement under the Victorian Housing Laws?

d. does Capital Gain Tax applies here in this context?

e. What happens when the expected market value for the unit apartment should come lower than than actual purchase price? Can the new buyers claims tax losses for their unit investments under the Victorian Housing Laws?

2. Please note that this involves a real life case presently under considerations.

3. Can the relevant members who are practising conveyancing in Victoria and other more experienced/better informed members, kindly advise us accordingly, please.

4. For the members' general education as well as for my own personal self-education and problem-solving purposes, please.

5. Thank you.

regards,
Kenneth KOH

 

[Twitch]

Kenneth,

I've signed just such a contract in Victoria and then nominated an alternate buyer prior to settlement. I believe the test as to whether stamp is payable is whether any money changed hands between the original buyer and the new. I paid no stamp as I earned no money from the transaction.

cheers.

 

[Kennethkohsg]

Dear Mdk92,

1. Thanks for your confirmation. I thought so too.

2. Would you be able to provide me with a copy of the relevant housing legislation or to point me to its source and access, please.

3. In our case too, there is also no real money transaction between the 2 sets of buyers.

4. For your kind updated, please.

5. Thank you.

Cheers,
Kenneth KOH

 

[Kennethkohsg]

Dear MDk92,

1. Would you happen to know and able to confirm for me if the term, "relative" as in a nominee case, also include a "distant uncle-niece" relationship under the Section 3(1) of the Duties Act 2001?

2. Looking forward to an early confirmation, please.

3. Thank you.

regards,
Kenneth KOH

 

[Twitch]

Kenneth, unfortuantely I don't have the details you're after, I simply spoke to a solicitor who said what I was doing was OK and no stamp payable. Perhaps you could contact a Victoria solicitor to confirm. Obviously tens of thousands of dollars hinge on this so it's worthwhile to confirm your own circumstances (eg not sure if this rule would hold true for non-citizens).

cheers.

 

[Kennethkohsg]

Dear Mdk92,

1. Yes, I will do it if I have to eventually.

2. In the meantime, I am leaving this matter for the young purchasers to learn to sort things out for themselves with their own solicitors... and you would not believe it... their solicitor is actually based in NSW, rather than in Victoria.

3. For your kind update, please.

4. Thank you once again for sharing your info/experiences with me.

5. I much appreicate your inputs, please.


Cheers,
Kenneth KOH

 

[Twitch]

Kenneth, I feel it is very unwise to engage a NSW solicitor to advise on a Victorian title transfer. The rules are different state to state. It would be far better to consult by phone with a Victorian solicitor than face to face with a NSW one.

Good luck

 

[Kennethkohsg]

Dear MDK92,

1. I fully agree with you.

2. However, it is something beyond my control at this point in time as in their eagerness to invest overseas, the young purchasers have trusted the wrong people in Singapore 3 years ago namely the RE agents marketing the apartments while I was away in Australia.

3. I only came to know about their overseas investment recently in August 2006.

4. Thus, I am now giving them some time to learn to sort things out for themselves as part of their own investment education on the ground so that they can learn the due consequences, without losing their own self-confidence and without having to lose too much monies for themselves.

5. Hopefully, they will be wiser the next time when they want do their own property investing again and truly know who to trust and who not to trust accordingly.

6. Do you know of good/reliable conveyancing lawyers in Melbourne whom I can refer them to ? ...And what are the usual professional fees charged by the conveyancing lawyer to handle a sale and purchase transaction.

7. BTW, they have purchased their unit apartment, off the plan, to be used for student accomodation rentals for $275,000, 3 years ago.

8. Recent valuation by WBP Valuers this month which I have helped them arranged for the valuation exercise, shows that the unit will only have a market value of about $225,000 upon its completion, which is expected at the end of this year.

9. Fortunately, they have an uncle who has invested profitably into the Perth property market through me at the Anchorage Estate in Rockingham. He has just sold off the investment property this month and made a lot of monies for himself on the house sale.

10. Consequently, I am helping the young puirchasers to arrange for their uncle to take over their "money-losing" unit purchase investment on their behalf, so that their uncle and aunt are also able to legally minimise their own capital gains tax liability on their recent house sale in Perth, as a result of off-setting their capital gains with the anticipated losses to be generated from their new "loss-making" property investment.

11. For your kind update, and further comments/discussion, please.

12. Thank you.

regards,
Kenneth KOH

 

[Twitch]

I've used Eric Choo of Moores Legal (a medium sized law firm) in Box Hill, 03 9898 0000, he navigated a tricky settlement for me and did it well. Cost was around $1,000 from memory.

I hope it all turns out OK for your relatives.

Good luck

 

[Kennethkohsg]

Mdk92,

Thanks.

Cheers,
Kenneth KOH