Am looking to buying a property from a seller who previously purchased off the plan. My understanding is they do not have to pay SD as it is under $600k. Should we settle prior to the seller completes settlement with the developer, does that mean my SD is exempted too? This is assuming the developer is paying for the SD. I am just worried that after settlement I will have to fork out additional SD on top of my purchase price. All help appreciated. Thanks
Stamp duty NSW help..
- Thread starter lowie
- Start date
If the seller purchased OTP at under $600K after 1 July 2010, then yes, they would not have to pay SD in NSW due to the Home Builder's Bonus program.
That is a VERY interesting Q. I am assuming that you are buying off a seller who has exchanged on an OTP plan property and he is flicking it onto you before he has to settle on it (and it has never been lived in before)?
Firstly though, you cannot settle before the seller settles with the developer. The best you could hope for is a simultaneous settlement. (the reason being that the seller cannot sell to you something which he does not yet own, since he himself has not settled with the developer)
Secondly, you will not be buying OTP (I assume this development is nearly finished??). As such, "for those buying a newly constructed or under construction home up to the value of $600,000, a 25 per cent stamp duty discount will apply."
So it looks like you will still possibly be up for 75% of the SD owing, unless this property is not yet constructed.
The developer WON'T be paying SD. The purchaser pays SD not the vendor.
I think you need to call the OSR in the morning to clarify your SD obligations (if any).
The vendor has not yet settled with the developer. So does that mean I cannot purchase the property? Or does it mean the vendor is selling me the OTP contract? The vendor is saying they will pay for any SD costs though....does this mean I can put it in the contract and deduct it from any settlement amount?
You can purchase the property. The vendor is selling you the property, not the contract.
If the vendor is offering to pay your stamp duty costs then make sure you get a lawyer and put it in the contract. You should probably get them to make a payment to the OSR before settlement, or at settlement.
If the vendor is offering to pay your stamp duty costs then make sure you get a lawyer and put it in the contract. You should probably get them to make a payment to the OSR before settlement, or at settlement.
2 scenarios
1: If vendor changes their contract with the developer to my name, will i be exempt from stamp duty under as it is "off the plan" or would it be 25% discount?
2: If i purchase after vendor settles with developer would i still get 25% discount on stamp duty under "new home" as it would not have been occupied before
You can't just change a name on the contract. They would have to rescind their contract and then the developer would enter into a contract with you. So you would probably be classed as buying a new property.
Off the top of my head I don't know the answer to 2, but possibly it wouldn't be classed as new.
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