Selling property to relative

[superoink]

Hi all,

I need some advice and guidance. I have a PPOR (owned for a few years) which I am looking to sell to a close relative for the price price I bought it for. As opposed to going through a real estate agent, how do I go abouts preparing a contracts of sale? Over here in WA, we can't use the Real Estate Institute of WA's forms, as you need to be a licensed real estate agent to use it. So I will need to get a private one prepared? Can the conveyancer prepare one?

Both myself and the relative will be using a common conveyancer to do the settlement.

Can someone please advice the best way (cost effective way) to actually sell a property to a relative? eg. where to go, what documents to get, the approach etc?

Thanks.

 

[Terryw]

There is possibly no need to use a contract of sale, as long as the relative trusts you and doesn't need to do the various checks etc.

You would just need to do a transfer document and your solicitor could help you with the process.

 

[Ross]

Superoink,
We did this a few years ago and used the family solicitor/conveyencor to do the paperwork.
In NSW familuy transfers require a licensed valuation to be done first (may cost around $300) and you must pay stamp duty on the transfer on the valuation amount (at a minimum). I imagine all states would be the same otherwise State Revenue Office is being jipped.

Ross

 

[sanj]

speak to your settlement agent.

also, you can get an O&A from the post office, looks similar to the REIWA one but is for private sales.

 

[Joe D]

Have assisted a relative with this in the past and it was pretty straightforward using the O&A forms that Sanj suggested from the Post Office.

If the property is strata titled there are a few extra forms (form28 Disclosure Statement ??, Form 29 ?Buying and Selling a Strata Lot) plus joint form of general conditions for sale of land.

Settlement agent may be able to point you in the right direction.

 

[superoink]

Thanks for the responses! I will be selling it to a very close family member and there will not be any trust related issues. Having said that, will there still be a need for the contract of sale or o&a form? Or can I just go straight to the settlement agent and give them the details?

Cheers.

 

[Terryw]

A written contract shouldn't be needed - but a contract for land needs to be written to be enforceable. Even if one is then you could just draw one up yourself. Check with the office of state revenue in your state and the land titles office.

 

[Wunderbar]

You have to make sure you sell the property to your relative at market value. Failing to do so makes you liable for evading stamp duty. And you don't want that...

 

[sanj]

i was under the impression you could sell it at any damn value you please and if it is quite far off market they would do a val and make you pay stamp duty on the market value

certainly not "liable for evading stamp duty". besides the stamp duty is of no concern to the seller and is an issue for the purchaser

 

[Terryw]

i was under the impression you could sell it at any damn value you please and if it is quite far off market they would do a val and make you pay stamp duty on the market value

certainly not "liable for evading stamp duty". besides the stamp duty is of no concern to the seller and is an issue for the purchaser

You can sell for whatever value you choose, but stamp duty and CGT would be calculated on market value.

 

[Andrew_A]

I've been on both sides of these family transactions.

Last time I was selling we agreed to get a valuation done on the property to work out the sale price, makes everything objective, valuation in 2009 came it at 60k under my last bank valuation which was an optimistic one but....still.. Valuer is now off my Christmas Card list.

I was kindly offered more but I didn't agree, with the benefit of hindsight probably cost 25k or so to me compared to taking it to market but happy to see family member benefit, was still a win win scenario.

 

[Wunderbar]

i was under the impression you could sell it at any damn value you please and if it is quite far off market they would do a val and make you pay stamp duty on the market value

certainly not "liable for evading stamp duty". besides the stamp duty is of no concern to the seller and is an issue for the purchaser

Well if you're not liable then your relative is. All 2 pieces from the same puzzle.

The ATO frowns upon transactions that are not at market value. Why bother with the hassle?