VIC: Buying from Parent-in-Law

[gldsaucer]

My parent-in-law has a house worth about $500k. There is still $200k mortgage on the house. We (my partner and I) are planning to buy the property off my parent-in-law. The plan is to pay off their mortgage in a lump sum from our money.

In terms of the conveyancing, stamp duty and paperwork, how should I go about this? The house price is obviously below the market value as the market value is around $500k.

 

[Terry_w]

First thing to do is to see a lawyer and get some legal advice as there are many potential issues. Look at the centrelink aspects as well (if any) and probably get some tax advice.

Then get the loan pre approved and do the conveyancing from one set of names to the other.

 

[gldsaucer]

First thing to do is to see a lawyer and get some legal advice as there are many potential issues. Look at the centrelink aspects as well (if any) and probably get some tax advice.

Then get the loan pre approved and do the conveyancing from one set of names to the other.

Seeing that I will only be paying 200k, I am just wondering how much stamp duty do I have to pay?

The other way I am thinking is to pay 200k to my parent-in-law and pay off their mortgage. Once the title is in their hand then apply to SRO for transfer of title and pay stamp duty. Would this work?

 

[Aaron_C]

The stamp duty is payable on the FULL market value, regardless of what you pay for it in actual fact. So stamp duty on $500,000 which is about $30,000.

 

[gldsaucer]

The stamp duty is payable on the FULL market value, regardless of what you pay for it in actual fact. So stamp duty on $500,000 which is about $30,000.

How do they determine that the value is $500000? Do I have to get a valuer to value the property?

 

[Aaron_C]

How do they determine that the value is $500000? Do I have to get a valuer to value the property?

Yes that would be the proper approach.

 

[landlubber]

Yep ..you'll need it valued.

How do they determine that the value is $500000? Do I have to get a valuer to value the property?

Simply...yes... We recently sold one of our houses to our son & his partner.
The VIC SRO was "all over it". The property was valued by CBA for finance purposes and even that wasn't acceptable to SRO. We'd had a proper valuation and that was deemed too old. So we then had to get a further 'opinion' from a local agent, which was $10K higher than the valuation. Only then was the SRO willing to accept it. It just went on and on. They really want their 'pound of flesh'. Keep in mind ...all the states are heavily in debt. They want every cent. The public servants are fighting for money for their salaries and their pensions. Simple as that .... LL