Stamp Duty on sale to spouse

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From: Anonymous


Hi all,

I know this has been asked and answered before, but I cannot for the life of me find it using search.

My wife and I are separating and wish to sell our properties to each other. Do you have to pay stamp duty if we sell to your spouse? Is there a way to reduce the cost of splitting the assets?

I'm a regular on the forum and am remaining anon due to personal situation.

Hope you can help.

Anon
 
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Reply: 1
From: The Husband


Hi Anon

I believe that you can transfer your (or part of) PPOR to your spouse without paying stamp duty in NSW. You need to sign a stat dec that this is what you are doing. I am not sure about your case though.

TH
 
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Reply: 2
From: Mark Laszczuk


This brings up an interesting thing for me. Sounds like an amicable split (lucky for you guys). My partner and I have (occasionally) talked about what ifs, like What if we divorced (we have to get married first though!)? We are talking about holding onto the assets we have built together for the cash/growth. This is especially pertinent to us if children are involved, re: we keep the assets and hand them over to the kids at age 21 or something. Now, I know this all sounds terribly naive, but are there people out there discussing such issues, or better are there people who have written up contracts detailing these sorts of things? Would contracts like this be recognised in divorce proceedings if (God forbid) things went bad and we refused to even acknowledge each other? Just curious to know, as (obviously) my partner and I wish to explore these things further.

Mark
'no hat, some cattle'
 
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Reply: 2.1
From: Richard Hunt


Anon,

Agree with TH, NSW duty concession is applicable on breakdown of marriage.

Transfers need to be based on one of a number criteria including a court order, or where the split is amicable, an agreement between husband and wife. As TH pointed out, stat dec is required to evidence intention to apply for a dissolution of the marriage or that the parties have separated with no intention of reconciliation.

The concession applies to all matrimonial property, whether PPOR or otherwise.


CGT ISSUES

Assuming the properties are post-CGT assets, you may also be able to avoid triggering a CGT liability on the transfers, although I understand that the tests for this may be a little more rigorous than the duty criteria.

Whether you ultimately obtain CGT roll-over relief or not, it would be prudent to assess in each situation the actual (no roll-over relief) or potential CGT liability (in the case of roll-over eligibility) for you and your wife, so that this cost may be reflected in the value of the asset splits between you.


Regards
Richard
 
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Reply: 3
From: Dale Gatherum-Goss


Hi Anon

I am sorry to hear of your loss and hope that things get better for you soon.

In Victoria, there are also stamp duty exemptions for transfers of assets between spouses.

As for CGT, there are roll over relief measure built into the tax act to ensure that you do not suffer any more than you have already - however, to access these roll over provisions you do need a family court order . . .

Your legal people should be able to give you something that covers these issues in quite a bit more detail, as might the family court.

Good luck

Dale
 
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Reply: 2.2
From: Rick Kirk


Hi Mark,

I imagine that most people discuss this type of thing happening. No one ever expects it too but in this day and age most astute people wish to cover themselves for any future event. I know, I've been there.

Given that you're not married yet (I think that's what you said), it is possible to draw up documents such as the American favourite pre-nuptial agreements that protect pre marital personal assets in the future. I would also imagine that it's possible to form a contract at any time specifying how asset splits should be handled in these unfortunate circumstances.

The problem with it is that it takes two very special types of people to negotiate this sort of thing up front without one or the other feeling that trust is already lacking in the relationship.

If you're really worried about it structure your investing as 50/50, then everything is fair and equitable. Unfortunately, to do this, you lose the ability to have title in one name or the other for Tax considerations.

Anyhow.. This is off topic for this thread. I'm happy for anon's amicable position. Wish I'd have had that at the time :)

Cheers,
Rick.
 
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Reply: 3.1
From: Anonymous


Thanks to you all for the feedback. It certainly sounds better than I thought it would be. I was thinking worse case scenario of paying all the stamp duty and capital gains tax, new mortgage fees, solicitors fees etc etc.

As for the amicable split...I believe we are both reasonably mature about the whole thing and realise that it is in both our interests to sort it out so we both come out on top. We had discussed in the past what we would do if we ever broke up, so the mind set was there. I've seen work mates lose everything because one spouse got greedy and all their cash went to solicitors. By the way, my wife and I are still renovating a couple of places together so that we have good equity in place when we have to refinance. I couldn't have asked for a better split I guess. It certainly make life a little less traumatic.

Thanks again

Anon
 
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Reply: 2.3
From: Michele B


Relationships rarely end neatly, even when they look amicable from the outside. If there's still some feeling, and especially if there's more on one side than the other, emotions get involved. Fair and rational people can become unreasonable, and every concession becomes a bargaining chip or worse, a weapon.

So assume a messy split. And as few of us will sustain a happy and healthy relationship for 40 to 50 years (and is that healthy anyway???) a split is probably inevitable.

*MB is wearing practical hat, but secretly prefers romantic chickie hat*

Mark, don't agonise over the future, you've probably got years and years ahead of you. In fact the more time you have, the better your position will be should you split up. As anyone with assets will tell you, lotsa net worth equals lotsa choice.
 
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Reply: 2.1.1
From: Anonymous


Thanks alot for your feedback. I have done some searches on the web, and it seems that we should get away without paying Stamp Duty and hopefully obtain some CGT Rollover relief. That certainly takes a burden off.

Thanks again

Anon
 
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Reply: 3.1.1
From: Jerry Maguire


hi Anon
you can do this just by going to the land title office to fill in a basic transfer cost about $60
next get a solicitor to get the transfer done cos you need a stamp from them as well cost $250-$400
you need to tell the lender as well who you are transferring the property to cost $150-$300 charge by the lender
so you don't have to pay stamp duty just pay stamp duty on the documents only
total cost about $550

the look on your face when you done it
PRICELESS
 
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