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Transfer of Property
At ALA LAW (formally Amanda Little and Associates), we can assist with a transfer of property to your name, or to a third party associated with property settlements after divorce (wherein one spouse transfers to the other), family property transfers, or estate planning. We offer competent advice to ease the process of transfer of property.
What is a transfer of property?
In NSW, a transfer of property refers to the act of transferring the legal ownership of a property to another person. When it comes to the process of transferring a property title, there are various things to consider including the legislation, taxes and duties, and a myriad of legal documents required to be prepared to affect the transfer. It is important to understand the process and the requirements to ensure that the transfer of property goes smoothly.
When do you require a transfer of property?
Property transfers are more common than you might think. You might consider a transfer of property as a whole or in part to another individual for several reasons.
Some of these reasons include:
- A relationship breakdown (a separation or a divorce);
- Gift to a family member or friend;
- Sale of Property to a family member or friend;
- For estate planning purposes;
- In the event of entering a new relationship (i.e., transferring a share of an existing property to a spouse);
- In the event of the unfortunate passing of a loved one, especially in the case of shared ownership, it would require a transfer of property. (This is done by way of Notice of Death, or a Transmisson Application)
ALA LAW specialises in providing ease and excellence to our clients in every step of the transfer process.
How do you transfer property?
The NSW government recommends that individuals seek legal advice when affecting a transfer of property. Transfer of property is undertaken via PEXA, by way of the lodgment of Transfer Form 01T. PEXA is an online property platform, which allows for real property to be dealt with electronically.
ALA LAW are experts at dealing with property transfers. Our amazing team will help you organize the required documents, stamp duty valuations, and transfer duty right to ensure your transfer is successful.
We can assist you with:
- Preparing all necessary documents and agreements;
- Deciding on the best pathway for estate planning;
- Arranging all the necessary forms, including the completion of exemption application forms and duty forms;
- Arranging a stamp duty valuation of your property;
- And much more.
ALA LAW Conveyancing Advice
When effecting a transfer of property, we will provide you with a fixed fee for our professional services. You simply need to provide all the relevant information about the property, the transferor, and the transferee. If the transfer is on a mortgaged property, the bank must also consent and produce the title to PEXA to allow registration of the transfer, we can assist with:
- Stamp duty
- Stamp duty extension (where applicable)
- Land tax implications
- Document transfer
- As well as bank liaison.
If the property is mortgaged, the bank may require that the previous loan be discharged, and a new loan be entered into with the names of all persons who shall be on title. The team at ALA Law can discuss this with you further.
Types of Property Transfer
When effecting a transfer of property, depending on the reason for the transfer, the process of effecting a transfer will differ, as explained below:
Spouse to Spouse Transfers (property settlements)
For a transfer of property to occur between spouses, the parties to the breakdown of the relationship will need to have reached an agreement, this is done by way of a ‘property settlement’
This property settlement will then be formalised by either way of Binding Financial Agreement or Consent Orders.
The formal agreement will then give rise to stamp duty exemptions for transfer of property between spouses undertaking a property settlement as it is pursuant to The Family Law Act (1975)..
TRANSFER TO NEW SPOUSE
Once you have been in a relationship with a new spouse for a period of time, or get married, you may wish to consider a transfer of property from the name of one spouse to the joint names of both spouses.
In this process, the new spouses name will be transferred onto the property and then each party will hold a half share.
This process does not usually attract stamp duty as it is usually an exempt transfer. However, there may be other taxation and duty consequences that need to be considered.
There are many reasons you may wish to do this, but the main reason usually relates to estate planning purposes.
A family property transfer (also known as an inter-family transfer) is a transfer between family members. Most inter-family transfers attract stamp duty and may also trigger capital gains tax (if it is a CGT attracting asset)
Inter-family transfers occur regularly when there are large family property holdings (such as farms etc.). These specific forms of transfer (if the land is a primary producer) may be eligible for stamp duty exemptions.
They may also occur by way of an estate planning strategy, or to ensure a property goes to a particular family member.
The value of a property for the purposes of stamp duty is determined by a stamp duty valuation which is prepared by a registered valuer. The team at ALA law will arrange the valuation and calculate the stamp duty payable by you.
When determining if an inter-family transfer is right for you, we encourage you to speak to a property lawyer (such as those at the ALA law team) to discuss your options to achieve the results you seek.
You can choose to gift a property to a family member such as a spouse, a child, or a sibling.
The Title Office and banks require a “Transfer of Land” document as well as any relevant State Revenue Office documentation.
Often, to protect both the transferor (original owner) and the transferee (acquirer), it is safer for both parties to provide a “Deed of Gift” to formalise the transfer.
The formalisation of the matter will lead to greater clarity and avoid any confusion in the future. It is always best to have intentions in writing.
Stamp duty will be payable on the transfer, and any such transfer may additionally attract CGT. Further if the person receiving or gifting the property is in receipt of a Centrelink pension, prior to any of the above steps being considered financial advice is an absolute must. Gifting a property may cause the recipient to lose their entitlements and create financial hardship on an ongoing basis.
Sale of a property to a family member or friend by way of transfer
A transfer of property can also occur when selling property to a family member.
When parties reach an agreement between them in relation to purchasing a property, this can be affected by either entering a Contract for Sale or a Deed. Security for the transfer of the property can be registered by way of consent caveat or mortgage if the full amount is not being advanced upon the transfer.
For example, John has a property he wants to ‘sell’ to his daughter Sam. It is agreed that Sam will buy the property for $400,000, but Sam only has a $200,000 deposit. This means Sam will either need to obtain a mortgage for $200,000 from a bank or can enter into a mortgage or loan agreement with John to repay him the $200,000 by way of loan. This can then be registered as either a mortgage or a consent caveat (in the case of a loan agreement) on the title of the property.
Often, the seller, who is in this case a family member, might reduce the Contract price. However, stamp duty and any potential capital gains will be based on market value as opposed to the contract price. ALA law can provide expert conveyancing services in these situations.
Taking into account the above example, the property is valued by way of a stamp duty valuation at $500,000., not the $400,000 as agreed between John and Sam. Stamp duty will be payable at the greater amount and if it is an investment property, the CGT will also be calculated off the higher amount.
Transfer of property: Costs to consider
Transfer of property costs depends on the type of transfer. Costs include:
- Professional fees for the transfer (i.e., lawyer costs);
- Professional Fees if a Deed, Contract of Sale, mortgage or Caveat is required
- Stamp duty (if applicable)
- Bank Fees
- LPI Fees
- Further taxation consequences (e.g. CGT)
The team at ALA law will provide you with a fixed fee price to effect the transfer. We will first discuss with you your needs, determine the best way to proceed and then provide you with a cost agreement that sets out the fees for the work we are undertaking on your behalf.
Unless a transfer meets one on the basis of exemptions (property settlement, deceased estates, primary production) stamp duty will be payable on the transfer. This is calculated either at market value (if the property was sold on the pen market) or by way of stamp duty valuation if the property is a private transfer.
If there is a mortgage registered over the property which is proposed to be transferred, the bank will likely require the existing loan/mortgage be discharged and that a new mortgage be entered into with all registered proprietors on the title.
Title Office fees are another cost to consider, and they need to be paid by the acquirer. If the transfer of property is a gift or change of ownership, the Title Office will provide a specific fee based on the financial year in question. Property that is transferred via a sale will incur a transfer fee based on the price listed on the Transfer of Land.
Other Important things to consider before effecting a Transfer:
Effecting a Transfer of property may have further ongoing consequences including effects on Centrelink, possible future family provision claims and other complicated legal issues.
When you seek the advice of ALA Law, we will step you through each of these issues, we will strategise with you and your Accountant/Financial Planner, to affect a transfer and achieve the results you want with:
- Minimal legal fees;
- Minimal taxation consequences;
- Minimising the possibility of any challenge upon your passing;
- The effective estate plan;
- And to ensure that the outcome does not give rise to claims in equity or property law.
You can now see the various layers to consider when it comes to a transfer of property. Whether it’s a family property transfer, transfer property to spouse, or a regular transfer of property, ALA Law is full of professional, caring and thorough experts to assist you. Our property lawyers will handle your transfer in a safe and punctual manner.
We would love to assist you with your family transfer and/or property settlement. Our team can assist you to transfer a property to your name, or to a third party, with property settlements after divorce (wherein one spouse transfers to the other), family transfers and with estate planning.