Question on Of The Plan Purchase

J

Jk200sx

My understanding in Victoria is if you buy an apartment off the plan, then the stamp duty payeable is based just the land component.

What is the rule/law in QLD if you buy an apartment off the plan? Is it just the land that you pay stamp duty on, or for the total cost?

Secondly (and I suppose it depends on the question above), if someone (in QLD) purchased an OTP apartment and they were not in a position to settle at settlement ( and providing they had a nomination in the contract), if a nominee took over the contract, would the same stamp duty be applicable as if they purchased at pre construction?
 
Jk200sx said:
My understanding in Victoria is if you buy an apartment off the plan, then the stamp duty payeable is based just the land component.

What is the rule/law in QLD if you buy an apartment off the plan? Is it just the land that you pay stamp duty on, or for the total cost?
Click to expand...

Transfer duty is payable on the higher of the market value and the contract price.

Jk200sx said:
Secondly (and I suppose it depends on the question above), if someone (in QLD) purchased an OTP apartment and they were not in a position to settle at settlement ( and providing they had a nomination in the contract), if a nominee took over the contract, would the same stamp duty be applicable as if they purchased at pre construction?
Click to expand...

Transfer duty will be payable if you nominate regardless of when this occurs. The only usual way to nominate to a third party in Queensland without paying double transfer duty is by way of a Put and Call Option Agreement/Call Option Agreement.
 
Sorry, maybe I wasn't clear with my original question.

As a background, I purchased an OTP apartment about 6 month ago in Melb for a price of $499K. When the property settles, I do not have to pay stamp duty on the whole amount, but only on the land component. There is a provision in the contract where the landed value is listed, and this is the amount on which stamp duty is payeable on. In this situation the land value was ~130K, so this means I will only need to pay ~2.5K in stamp duty.

My question relates to QLD and their property laws:
1. If you purchase OTP in QLD (and construction has not begun) do you only pay stamp duty on the land value only?

2. If a person purchased OTP, and for whatever reason are unable to fulfil the purchase, can someone else (nomination)take over the contract? If so, are they only obliged to pay the smaller amount of stamp duty if item was was true?
 
Jk200sx said:
Sorry, maybe I wasn't clear with my original question.

As a background, I purchased an OTP apartment about 6 month ago in Melb for a price of $499K. When the property settles, I do not have to pay stamp duty on the whole amount, but only on the land component. There is a provision in the contract where the landed value is listed, and this is the amount on which stamp duty is payeable on. In this situation the land value was ~130K, so this means I will only need to pay ~2.5K in stamp duty.

My question relates to QLD and their property laws:
1. If you purchase OTP in QLD (and construction has not begun) do you only pay stamp duty on the land value only?

2. If a person purchased OTP, and for whatever reason are unable to fulfil the purchase, can someone else (nomination)take over the contract? If so, are they only obliged to pay the smaller amount of stamp duty if item was was true?
Click to expand...

The answers are in my previous post.

1. - No, you pay stamp duty on the higher of the market value and the contract price. You do not pay stamp duty on the land value.

2. - Stamp duty must be paid twice in this case.
 
http://www.sro.vic.gov.au/ca25758c0...575D0002A87C518E490D796850F8ECA2575C1008187C7 - see 3rd paragraph

http://www.findlaw.com.au/articles/420/off-the-plan-property-purchase---things-to-conside.aspx - See first bullet point

http://www.whichproperty.com.au/New...ty_investors_benefit_from_buying_off_the_plan - see point 4

Clearly these sites show a stamp duty saving. But what I want to know is what the rule is in queensland, specifically if someone takes over the contract (perhaps point me to a web reference?)

Thanks!
 
Jk200sx said:
http://www.sro.vic.gov.au/ca25758c0...575D0002A87C518E490D796850F8ECA2575C1008187C7 - see 3rd paragraph

http://www.findlaw.com.au/articles/420/off-the-plan-property-purchase---things-to-conside.aspx - See first bullet point

http://www.whichproperty.com.au/New...ty_investors_benefit_from_buying_off_the_plan - see point 4

Clearly these sites show a stamp duty saving. But what I want to know is what the rule is in queensland, specifically if someone takes over the contract (perhaps point me to a web reference?)

Thanks!
Click to expand...

Check the duties act qld
 
Jk200sx said:
http://www.sro.vic.gov.au/ca25758c0...575D0002A87C518E490D796850F8ECA2575C1008187C7 - see 3rd paragraph

http://www.findlaw.com.au/articles/420/off-the-plan-property-purchase---things-to-conside.aspx - See first bullet point

http://www.whichproperty.com.au/New...ty_investors_benefit_from_buying_off_the_plan - see point 4

Clearly these sites show a stamp duty saving. But what I want to know is what the rule is in queensland, specifically if someone takes over the contract (perhaps point me to a web reference?)

Thanks!
Click to expand...

The answer is not going to change no matter how many times you ask the same question. It doesn't matter what happens in Victoria, I have told you how it works in Queensland.

You pay stamp duty on the contract you have entered into on the higher of the market value and the contract price (not the land price). Once you on-sell or nominate another party to take over the contract, that party must then also pay duty on the same basis.

If you just want a way out of the contract and have found a new buyer on the same terms as your old contract, the best way to proceed without paying stamp duty twice is to enter into a deed of rescission that rescinds the old contract and the new buyer enters into a new contract with the seller. This will only work if the seller agrees and section 115 of the Duties Act 2001 (Qld) is complied with: http://www5.austlii.edu.au/au/legis/qld/consol_act/da200193/s115.html.
 
Scott No Mates said:
To lock in a price for an unknown product of dubious quality with a developer/builder with possibly no track record in uncertain market conditions with no certainty that the product will be delivered at the nominated point in time.
Click to expand...

Hi all,
I have been trying to find some OTP information on the forum, and can't seem to find the answers I'm looking.... so YES, I am certain that the same questions ahve been asked about 1000x before, but I'm too think to find them. Please direct me to the comprehensive OTP thread if there is one...

I'm looking at an OTP, because of the NSW gov't generous grants and Stamp Duty exemption. But I am totally new to property (duh) so I don't really know what sort of questions I should be asking the agent, or more importantly what homework is required to check out the developper is legit, and can put together a solid high rise. I googled them, and called there office but despite being around "since 1960" there is bloody little written about them anywhere.

Or maybe as long as my lawyer does a good job with the contract, or if the builder has the right insurance. This is the important stuff?

Construction has not started yet (should start in the next couple of weeks). There is no display suite. Any advice would be appreciated.
Thx
 
Scott No Mates said:
To lock in a price for an unknown product of dubious quality with a developer/builder with possibly no track record in uncertain market conditions with no certainty that the product will be delivered at the nominated point in time.
Click to expand...

Love it!

Why on Earth would you buy anything off the plan??? even if you theorethically save on stamp duty... beats me....
 
Kipp said:
Hi all,
I have been trying to find some OTP information on the forum, and can't seem to find the answers I'm looking.... so YES, I am certain that the same questions ahve been asked about 1000x before, but I'm too think to find them. Please direct me to the comprehensive OTP thread if there is one...
Click to expand...

You can always google "OTP Somersoft.com" :)

Is it for you to live in?

Kipp said:
I'm looking at an OTP, because of the NSW gov't generous grants and Stamp Duty exemption.
Click to expand...

Do you know OTP prices are raised up by the amount you'll save on Stamp Duty PLUS profit margin (up to 30% over costs).

Kipp said:
But I am totally new to property (duh) so I don't really know what sort of questions I should be asking the agent, or more importantly what homework is required to check out the developper is legit, and can put together a solid high rise. I googled them, and called there office but despite being around "since 1960" there is bloody little written about them anywhere.
Click to expand...

You need to ask the agent for a previous project BUT you need to look for 3 different things:
1. previous work done by the architects doing the project you are interested in
2. previous work done by the developers doing the project you are interested in
3. previous work done by the builders doing the project you are interested in

I've seen the same developer to crap projects one time, then quite decent ones the next because they had different builders.



Kipp said:
Or maybe as long as my lawyer does a good job with the contract, or if the builder has the right insurance. This is the important stuff?
Click to expand...

Your lawyer can't cover you for the biggest risk - and that is you may not be able to get the loan you require. If you have cash to pay outright, no problems.



Kipp said:
Construction has not started yet (should start in the next couple of weeks). There is no display suite. Any advice would be appreciated.
Thx
Click to expand...

Get hold of the estimated outgoings (body corp etc) and double it to be closer to real life.
Do a very thorough inspection once finished - there can be lots to get fixed.
Make sure you know what's included - esp if there is no display suite, your contract will usually allow for variations such as orange tiles with lime green kitchen benches.
The builder will usually be allowed to run 5 years late, but you will not be allowed to exit the contract.


The Y-man
 
The Y-man said:
You can always google "OTP Somersoft.com" :)

Is it for you to live in?



Do you know OTP prices are raised up by the amount you'll save on Stamp Duty PLUS profit margin (up to 30% over costs).



You need to ask the agent for a previous project BUT you need to look for 3 different things:
1. previous work done by the architects doing the project you are interested in
2. previous work done by the developers doing the project you are interested in
3. previous work done by the builders doing the project you are interested in

I've seen the same developer to crap projects one time, then quite decent ones the next because they had different builders.





Your lawyer can't cover you for the biggest risk - and that is you may not be able to get the loan you require. If you have cash to pay outright, no problems.





Get hold of the estimated outgoings (body corp etc) and double it to be closer to real life.
Do a very thorough inspection once finished - there can be lots to get fixed.
Make sure you know what's included - esp if there is no display suite, your contract will usually allow for variations such as orange tiles with lime green kitchen benches.
The builder will usually be allowed to run 5 years late, but you will not be allowed to exit the contract.


The Y-man
Click to expand...

Thanks for the very detailed reply, sorry for the delayed response, haven't been on the forums for a few days.

In terms of research on the developer this was a dead end. The company (Tilrox developments) have no website, and when I finally got through to a director he said that yes of course they have done many residential high rise developments before, but no, if I needed some past projects I would need to speak to the real estate agent.
What a tool. If his company was any good they should stand by their work. :mad:
 
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