Seabird

Hi guys

Interesting question I hope.

Having arrived in Oz with my daughter 17 months ago, I was planning on buying a property in January 2008 if/when my current contract is renewed.

However as is Murphy's law I met an Australian man who has his own house and his former wife wants a settlement on the property. I do not want to live in someone else's place and pay rent to him, and would therefore want to buy into the property if all was still going well after some months of co-habitation!

My question is that I would then become a first time buyer, however he would not be and I have no idea how we could work it so that I become equally and severably liable for the property. Would we have to pay stamp duty, etc....???

Cheers

Seabird.

Mark_Rigby

Hi Seabird, a tricky question. But to try and help... A settlement agent would be able to help you in organising the change to the property ownership, through what is called a transfer of land document, to add you to the title. I'm not sure what stamp duty would apply, perhaps is would be apportioned?

I'm pretty sure that you would not be elible for the First Home Owners Grant in this scenario though, and you would not be eligible for any future purchase either. FHOG is only available if both parties to the transaction are first home buyers.

Hope that helps!

Seabird

Thanks Mark

That solves the FHOG issue! What is a settlement agent?

Thanks

Mark_Rigby

A settlement agent or conveyancer is someone who specialises in the legal side of property transactions. There should be plenty listed in the yellow pages for the city you are in.

BullcreekBob

G'day Seabird

Yes, it is an interesting question.

With the First Home Owners Grant and the reduced rate of stamp duty for first home buyers, these both require that ALL the shared owners of a property have never owned property before in Australia. This will exclude your eligibility unless the house goes solely into your name.

So, if you want to change the ownership of a house from "your bloke and Sheila" to "your bloke and you". No FHOG will be payable and full stamp duty will. So if his house is in Perth and worth $500K, it will cost you around $25K. The stamp duty will be $20,700 and there will then be fees and costs if a mortgage is involved as well as settlement agent fees. The settlement agent attends to all the "legal" stuff that in the UK is usually done by solicitors.

On a somewhat different note, and of course this is only my personal opinion, I would not want to buy into, nor live in a house by partner had bought/shared with someone else. I'd want a new start in "our" place.

Mark_Rigby

Full stamp duty would only apply if it was an on the market purchase. I'm pretty sure that only a reduced rate of duty would be applicable to add you to the title.

BullcreekBob

G'day Mark

Your reply prompted me to phone-a-friend who works at the Office of State Revenue to check what I/you had said.

It seems we were both wrong

The Office of the Valuer General will value the property. Stamp duty will need to be paid at the full rate but only for the exchanged share of the house. So, on a $500K property in WA, where the other person owned 50%, the stamp duty payable will be $10,700.

This is the case in WA, it may not be the case outside of WA because stamp duty is a state tax and varies from state to state.

Seabird

Thanks guys

In answer to 2 of the questions.

Firstly I am a strong character and am not bothered about living in the prior marital home at this stage, though I would do things like replace fittings and redecorate to a newly agreed style. If all works out, it would probably be desirable to downsize within a few years as his eldest son (kids stayed with Dad) is now 18 and my lass is 15. It seems pretty stupid to keep moving unecessarily given the cost. I'd rather create new memories of our own by travelling (perhaps a trip to introduce him to my old life in the UK and take him back to where he was born) instead of spending the money on an unecessary move.

Secondly we are in South Australia and if anyone knows what the rules are here it would be really helpful.

Thank you both for your help.

Seabird

naifyboy

my family and i will be going over on a 457 visa with the view of applying for PR as soon as we get there.

we will be looking to buy a house/land fairly soon after arriving.

as i have never owned a house in oz before, is the First Home Owners Grant something I can apply for and get?

Mark_Rigby

Hi, you should have no problems purchasing a property and getting a mortgage when you get here. However the First Home Owners Grant is only available to Citizens and Permanent Residents, so you may miss out on it altogether if you purchase before you become a PR. The grant is good, but at the same time I'd recommend making your decision to purchase based on your needs and circumstances at the time and don't wait just to pick up the $7,000 in benefits, if you can manage without it.

Mark_Rigby

Hi, good one then. I thought it would be a bit rich for OSR to charge full stamp duty.

Mark_Rigby

Hi Seabird, it may well be similar to WA. Maybe try contacting:

http://www.revenuesa.sa.gov.au/

regarding stamp duty questions, or try talking to a local settlement agent/conveyancer.

naifyboy

Great! - thanks for the advice

Loubags

Hi naifyboy

We came out on 457 last year and bought a house in Dec 06. Got our PR last week, so I thought I'd see if I could claim the FHOG in retrospect. Had an e-mail to say that I can't. You definately need to be PR / Citizen at the time of purchase. This is in WA, so not sure if that applys to all states.

However, I love my house and would have missed out on it if I'd waited until becoming a PR, so I can't really complain.

Good luck with the move.

naifyboy

Thanks Loubags - it wont stop me buying a house - just would have been nice to get some cash back!

cheers and thanks again!