Stamp Duty Issue

Hello everyone, I have a slight problem with stamp duty that someone may be able to clear up for me. I am part beneficiary with my sister in the old family home in Ormond, Vic. (Our mother passed away in October). My sister wants to sell the property now that probate has come through. We have yet to change the title.
I would like to buy her half out for half the current market value, but it seems by doing this it would attract stamp duty to be payable on half the value of the property. This being around the $20,000.00 mark. Ouchhh.
A solicitor I spoke to suggested there would be no stamp duty payable if the property went straight from my mother's name into mine, but it would be payable if it was transferred into both the beneficiaries names, and then into mine.
That sounded OK, but then I rang the State Revenue Dept, and they told me it was payable either way.
Just wondering if anyone has had any first hand experience with this type of situation?
Just a little side note that some may like to comment on: There's no way I can really afford to buy my sister out. I was retrenched recently and my partner isn't working at the moment either.
After a few phone calls to brokers, it seems I can easily borrow 60% LVR on a low docs. This will allow me to pay my sister out and give me around $90,000.00 left in the LOC. I hope to use some of this to restump and renovate the kitchen. The balance I would need to cover the short fall in the rental for a few years. Rent return currently would be around 2%. The place is somewhat run down.
 
If you intend buying the family home as an IP, you have to take a long hard look at it as an investment without the emotional attachment.

If this were NOT your family home, would you buy it as an IP? 2% is a very low return unless you foresee spectacular capital gain or there is development potential.

You say the place is run down. As it is interstate you will be limited in how much maintenance you can do.

And think very carefully about taking on a loan when you have little income. Renovations have a nasty habit of taking much longer and costing much more than you anticipate.

Would you be better off to sell the property and use your share as a hefty deposit on an IP with better returns?
Marg
 
Hello Marg,
Thanks for the reply. It's hard not to be emotionally attached to some degree.
No, I probably wouldn't purchase this if the circumstances were different, but it is in a prime location and would lend itself to a 2 unit subdivision later on.
I think by doing the stumps and kitchen I could up the yield somewhat.

You are probably right regarding another IP using those funds from the sale.
It's a big decision!!
Thanks again.
 
This situation happened to a client of mine recently. The dad passed away leaving the property to 2 children and child 1 paid out child 2 and had the property transferred into his name. It was in NT, but the stamp duty payable was as if it went to both children (no duty) and then the child 1 purchased half from child 2 (stamp duty).

It may also depend on the terms of the will. If there is discretion to transfer to one child you may get out of stamp duty - but this probably isn't the case.
 
Thanks ozperp and Terryw for the feedback.
ozperp, your comments on your blog were helpfull. We recently got an independent valuation that we are both happy with that we can just split in half. I'm happy to do that and so is my sister. Agents figures varied enormously.
Terryw, it looks like the same situation is here in Victoria. Thanks for the info.
 
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