Hello,
What's the best way to transfer my property to another person (friend) without lawyers or Conveyancer at the minimum costs possible?
If you could explain how and where to do it, that would be great. Please advice the time frame and all fees and tax that I may require to pay.
Thanks
It should be straight forward process. I have paid off my loan and I just want to put the title under my friend's name. I don't see why I can't do it myself!
Sadly its not that simple. There are tax implications involved.
I am with oscargamer on this one. Get a solicitor involved. Mess it up and it could prove very costly.
My sister who paid for her own apartment can't have the property solely in her name because the loan was co signed with my parents without her costing her transfer fees. So she just left it as it is.
the cheap way IS a conveyancer
DIY = disaster (unless you do a course and become a conveyancer)
if you transfer it into my name - i'll pay all the fees !
exactly, if it were me I'd use a lawyer.
My conveyancer had no idea what they were doing, they're hit and miss.
I found no difference in price between a lawyer and conveyancer when I got quotes last year. Lawyer was actually about $100 cheaper…That was in Melbourne, not sure about NSW.
@knk: Lawyers don't have any training when it comes to Conveyancing. They out-source that work to a Conveyancer and then just charge you an additional % on top for their work.
Asking a lawyer to do your Conveyancing is like asking a CEO to do your accounting. They'll just charge you a middle-man fee and have someone qualified/experienced do the actual work.
A typical conveyance by a registered conveyancer costs about $500 and takes 4-10hours of work. The rest of the associated costs are government charges/taxes/duties. Lawyers charge about $200-250 an hour & up.
Huh? You commented that lawyers have no training in conveyancing and will out source it - that's just not true.
The costs you're quoting also seem to be inconsistent with the other advice in the thread. Lawyers won't charge per hour for a conveyance (unless anduntil something goes wrong) - they'll charge you a flat fee of between $1000-1500
Conveyancing isn't generally a flat-fee job though, as every conveyance is different. A basic simple conveyance though, that is an easy flat-fee conveyance to charge, should NEVER cost you more than $600. Anything above that is almost always a lawyer/solicitor/middle-man just charging on top of the conveyancer's charge, for actually doing the work.
Well a lawyer who specialises or is familiar in this line of work then.
From what I've heard (and I may be wrong) the process to become a conveyancer isn't all that difficult.
@knk: It's a 3yr Advanced Diploma of 22 subjects at TAFE to become a registered conveyancer, or you can specialise in it as a lawyer - but few do due to the fact that conveyancers charge 2/3 the low or base hourly rate any lawyer does for any basic work. Most conveyancing courses also have a pre-requisite of Banking/Lending/Property/Law work experience before they'll let you enter too, as you need a good level of legal understanding before starting. The requirements are different in each state, though.
Most law firms who have lawyers do the conveyancing do it simply because it's filler work that they keep them busy with, when they have clients they know they can milk them for the billing hours unquestioned. Some states most people go to a lawyer & have no clue they out-resource it to conveyancers, other states people go straight to the conveyancer and then only deal with lawyers when actually needed. For the most part though, a huge number of people just do what ever their bank/lender recommends, as they have no clue either way.
That's quite a bit more involved than I thought it was. Having a quick google around for the Vic side of things I've found a few very short courses.
http://www.rmit.edu.au/study-with-us/levels-of-study/vocatio… - 1.5 years part time
http://www.reiv.com.au/learning/qualifications/diploma-of-conveyancing-(bsb52015) - 6 months full time on campus + 1 years experience prior to obtaining your license (probably the same for RMIT).
Interesting, I should become a conveyancer :) lol
After a horror story of incompetence I'll be very careful with who I use next time however whether it be a well regarded Conveyancer or a Lawyer.
@knk:
It's hard to find any real info on good/crap conveyancers and lawyers doing conveyancing anyway, because there's probably less than 200 in any state actively doing it. My advice would be to simply stay away from anyone who doesn't appear to have a strong grasp of English, or communication in general. Attention to detail, basic comprehension and precise understanding of the letter of the law is extraordinarily important in pretty much any aspect of property law. One missed condition, term or incorrectly used document could result in disastrous consequences for any client.
Do you hold the title?
Do you hold the discharge?
Do you know your friend has to pay stamp duty on the market value of the property (regardless of how much he/she may be paying you)?
Do you know this will be considered a CGT event?
Do you know it is illegal to conduct a scheme to avoid tax liabilities (just guessing)?
Yes I hold title, I don't know what's discharge ?
Yes I know that my friend will need to get a valuer and pay stamp duty on the market value
Ok, there could be a capital gains tax (CGT) involved if I will give it away as a gift, But as I said that I need to know the cheapest way to do it.
@fairland: Unless you know how to prepare a transfer and have it stamped, you will need a solicitor/conveyancer to arrange that part.
Discharge is a discharge of mortgage - would be noted on the title if the bank still holds a registered mortgage (although you may have already had the bank register their discharge and the title is now clear).
Do you want to tell us the real reason why you want to give away a property? The old "put it in someone else's name, "rent" it from them and claim expenses" gag??
Yes you are right. I have Discharge of Mortgage.
I know it sound strange to give something away like property, but my friend has been helping a lot and I am happy to give it to him as I have my own house. No need to be greedy :)
@fairland: Well if you are giving a property to your friend, I am sure he can splash out the $1-2k for a solicitor/conveyancer.
Yes you are right. But I don't him to pay a cent :) so pretty much I am paying for everything so I want to find the cheapest way to do it.
Has anyone done that before ? please share your experience
@fairland: From my own experience (yes, i spent ~$1000 to see the professionals for advice: solicitor+accountant). You/your friend biggest expense will be CGT + stamp duty.
1. You will pay CGT, unless it's your main residence or own pre 1985
2. Stamp duty
The government/council will want all their fair share. Regardless of you giving it away for $0. Your property will be based on market value. You may not be force to pay CGT during the transfer, but sooner or later the tax man will knock on your door.
The paperwork fee to transfer will be the least of your worry.
Pls seek a professional accountant/solicitor, it may cost you abit but will save you thousands down the track!
@junk3569:
How does CGT is calculated ? is based on the property value. Is there certain formula for it!
@fairland: CGT calculated based on market value from a registered valuer. However, don't go to the valuer, they will valued it in the government favour, fearing they will lose their license/put in under review. Anyway, put that aside. Your best bet is get the lowest estimated value from the real estate agent, get them to put it in writing how much it would worth with the current market, then get a conveyancer to do the paperwork of transfer. The land register office will accept that, unless it's ridiculously under valued. You should go see a solicitor for a 2nd opinion as i am just like u….trying to helping out a family member……
@junk3569:
I know that property is only subject to CGT if it is investment property but I have never rented it out and it was used by family member for many years.
Also real estate agents don't do valuations but they do appraisal which is just an opinion and it is not counted as legal valuation document.
I will contact few solicitors tomorrow to seek their opinions.
Cheers
@fairland: You are correct that you can't use a real estate agent's appraisal for stamp duty purposes. You need a proper stamp duty valuation.
I am not an accountant but I am fairly sure CGT is payable unless you are claiming the principal place of residence exemption. You don't live there from the sounds of it, so can't claim it.
Therefore the capital gain should be (current value - cost base) X 0.5 (assuming you have had the property for more than 12 months). That capital gain is then declared as income in your next tax return and taxed at your marginal rate.
@antt: The exact definition will depend on what purpose you are referring to, but I can't really think of any situations where you can claim a property is your PPR but not be living there.
Attend the State Government Titles office and fill out transfer form.
In NSW it is: http://www.lpi.nsw.gov.au/__data/assets/pdf_file/0008/25586/…
$50 extra if you pay Stamp Duty on transfer….
@djkelly69: It doesn't depend on the purpose that you are referring to. Seriously, it's quite clear that you don't know too much about what you are talking about. Have a good think about why you would want to claim a property as your PPR but not necessarily live there? Just because you can't think of a situation it doesn't mean that there isn't one
@antt: I can certainly think of reasons why you would want to claim a property as your principal place of residence without actually living there.
I can't however see many situations where it is legal to claim a property as your principal place of residence without actually living there, beyond some fairly technical situations for CGT purposes. Given OP has stated bought the studio a "long time ago" and that he owns his own family home as well, these are unlikely to apply.
And yes it does depend on the purpose you are looking at it for - for CGT purposes you may be allowed to consider a property your PPR without actually living there in certain circumstances, but for land tax purposes (in NSW at least) you cannot make a choice like that. Likewise for duties reasons.
I just want to put the title under my friend's name
You could just cross out you name and put in friends name and initial it.
Hahahaha
Not sure if serious, but no you can't.
I wish, that would be nice hahahaha
You do know that once you transfer it to your friend, your friend owns it, can sell it and you can't do a single thing from him/her taking the money.
It doesn't matter if you and your friend have an agreement that is different.
Once the property is in your friend's name, that's it.
Wouldnt you have to pay stamp duty?
Are you gearing up for a divorce or bankruptcy…?
Seems like it. A court can undo the transfer anyway for either of these two reasons if it was done for deceptive reasons
No I'm not married or gearing up for bankruptcy lol It is studio that I bought long time ago and I want to give it for free to my best friend.
You will have to pay duty on the transfer, and as it is a gift they will probably want to see evidence of its value.
Imagine how easy it would be to just "give" it to them, and them pay you cash which goes into some off-shore account… There are a variety of reasons that you cannot just give it to them. Pretty much the only way to give it to them without taxes/extra costs is in a will.
I only see alot of regret in this decision. Why not let him/her live there for an extended time period or maybe indefinitely till they don't need help.
The cheapest way would be to do it your self.
DIY conveyancing - is it worth going it alone?
However, this may not represent good value. Usually a DIY conveyancer will have at least some knowledge of real estate, finance and dealing with titles office . You will also need to lots of time.
Thanks for the link.
When it comes to paperwork, I believe it is the best to do it yourself. The majority of people are scared to do things by themselves as they have been brain washed that things won't go right and it will cost a lot to fix it up. (that's not true if you are using your brain correctly) and that's one of the main reason people stay in debts most of their life.
Go on. Do it yourself. Why are you asking the question here then if you are to use your brain correctly?
Waiting for the new thread.
'Friend taken me for a ride and won't give me my house back'.
It's going well so far then u need to be a smart (profanity) ass.. Good luck with using your brain
I'm a big believer in DIY. I love teaching myself new things and I'm also a bit of a tightarse (hence why I'm on Ozbargain I guess!).
BUT
Legal matters are rarely just "paperwork". As others have identified, there are other issues that need to be considered, and unless you have legal experience, you're unlikely to be aware of them or know how to properly address them.
There are other things that, by all means, you can attempt yourself - for example, I'm in the middle of painting my house. But there are other things you should leave to the professionals. This is a good example of the latter.
And just for the record - I'm a solicitor, and I think attempting this entirely yourself is not a wise move. I'm not in NSW so I'm not trying to fish for work.
Most of conveyancer search is done here the LPI shop. You can see the cost of each search which is done online for under $15 each, where I really don't need to do that as it is my own property and I have all the required documents for the transfer.
You can absolutely do all of that and give the documents to your lawyer to save money.
Unfortunately there could be CGT implications, Stamp Duty implications, and/or contractual issues with the transfer (and or other issues perhaps if you were to die and the estate went after your friend).
To give a gift like that you generally need to make a deed or take fair consideration.
I can't stress this enough - get a solicitor!!!!
You could be whacked by OSR and/or ATO (at least one of these is fairly likely) which would end up costing you more than the lawyer, or you or your friend could get embroiled in a costly legal battle if anything goes wrong (more likely than you think).
Edit: I was formerly a practicing solicitor (I no longer practice) and there is no way I would do this myself if I wanted to make such a transfer.
If you transfer it to me, I'll pay all the costs, just sign the documents 😀
While you can give the property away, you will have to pay all the usual government costs related to selling the property at market value. This is to stop people giving property away to avoid taxes etc.
You will still have to pay Capital Gains tax on the property even if giving it away. You'll need to get a proper evaluation done on it to establish its current value so the CGT can be worked out.
Might also mention that if you receive government payments, you can only gift a small amount of assets ($10k maybe?), and it will otherwise be considered as income.
$10k in 1 year or $30k over 5 years, otherwise still counted as a financial asset and 'deemed' income on it.
Have you discussed your intentions with your friend as they might have other ideas as to what they would do with your property? Your friend might just say "thanks for the gift however I don't like the stress of owning this property so I'm just going to sell it myself". So you might be best selling it and giving him the proceeds (thereby saving their stamp duty bill?).
Out of interest, I'm wondering what law would prevent the following - get your friend to live in or let them rent out your property (is proof of title required for a landlord?). In the future when they don't want your property any more, you sell and give your friend the sale proceeds. Sounds dodgy to me, however what step is "against the law", and which law is being broken (maybe just anti-avoidance tax law?)
Talk to an accountant and lawyer.
Or - if you want to regret it for the rest of your life - don't.
What is that saying about the person who acts as their own lawyer has a 'fool' as a client?
Just get a conveyancer. Ours only cost $350. Ring around a few smaller ones and get the best price. I like to DIY everything as well but compared to all of the other costs of transferring property it's just easier to get a professional to do it.
Why don't you just give it to them without transferring the actual title to them, will still be in your name technically but if you are great lifelong friends and are of the same understanding it won't be an issue. You could leave it to them in your will should anything happen to you and if they decide to sell down the track then they get the $$$ minus costs, would save 10's of 1000's just to change a name on a piece of paper. This is assuming generosity is your motivation, not tax minimisation/avoidance as some have suggested.
I very highly doubt it is generosity. Most likely trying to avoid too many properties under his one name, because the tax man usually would look at a guy with little income but owning many houses. amirite?
This.I believe the benificiary of a will is exempt from CGT if they have been living in the property and it has been rent free. They are also excempt from CGT if they sell the property within 2 years of death. There is no stamp duty either. This is most cost effective to your friend.
Btw, is your friend prepared for the stamp duty cost and a huge tax bill as a result of receving the property if it is just given to them, due to CGT? Depending on how wealthy your friend is, he/she may have to mortgage the property to afford the costs.
I think "Will" is way to go. Just looking for more information about it.
A "will" basically just says what happens to your possessions after you die, hence it would still technically remain in your name (until you die) but if you are both of the same understanding that it's now theirs this shouldn't be much of an issue, if your motives are finincial as opposed to just being very generous this option won't work.
CGT and Stamp Duty would be the greatest costs, so I wouldn't worry about the small costs involved for solicitor/conveyancer, you def need professional help if you don't want to get into trouble. Try to get the minimum value on paper for your property to minimise CGT and Stamp Duty, that's something that'll save you a lot more. You can't avoid CGT if you can't prove you lived there all this time even if your tenants were 'relatives' that didn't pay rent.
Next week on ozBargain: "Messed up a title transfer, what's the cheapest lawyer that can sort this out for me".
Rather "Messed up a title transfer, what do I need to read to defend this in court myself?"
I tried to do what you are trying to do now but I couldn't get it to be 'cheap'. Therefore I did it as below.
No 1 can be avoided if you are a conveyancer yourself.
No 2 cannot be avoided as if the valuer undervalue your property, they might be under investigation later on. You can try to ask them to provide the minimum market value though for stamp duty purposes.
No 3 cannot be avoided no matter how many times you try to say "it's a FREE GIFT"
Hope this helps
If it is your principal place of residence I don't see why CGT would be applicable. Just Stamp Duty.
Sniff, sniff…I smell tax evasion.
agreed this smells dodge as f…
Super dodge. I'm actually pretty lucky in that I have experienced the bank giving me the deeds ('discharge') at the last payment and I'm still relatively young.
The last thing on my mind is to give a piece of property away to even my own kid. Hell, I've been managing these properties for years and now its mine I give it away?
I love my kids and family but hell if I'm GIVING it away to them.
So you're telling me you finally own a piece of property worth hundreds of thousands and you're just giving it away to a mere friend.
GTFO.
Haha exactly my thoughts.. Someone giving away property in Australia..Hahha this is a great one, If in the rare case you op is one of the millionaires I doubt he'll post the question on ozb forum!
Anyway good luck, diy conveyancing now sounds like the ideal next step..
Its logically the other way around. If I have an old uncle or friend or whatever and he's got dementia and I kind of want him to give me his property then I would quite possibly work out how to get him to sign away his million dollar cottage in Maroubra etc.
I wouldnt ask here though.
Or is it a case of blackmail from the 'friend' with special photos or something?
They'd have to be cracking photos to make me give up a piece of Sydney real estate…you know, not even with farm animals, smallgoods or fresh produce! :P
Just get your friend who is receiving the property to pay for all the associated costs of transfer (i.e. conveyancing, valuations, stamp duty, potential CGT), it's going to add up. You're better off just letting him live in it rent free.
Also if planning on retiring look into how centrelink looks at this situation.
Can i be you're friend
Ill even pay the solicitor fees
The form is here: http://www.lpi.nsw.gov.au/__data/assets/pdf_file/0008/25586/…
Attend the titles office: Fill it out correctly, Pay Stamp Duty and Bingo!
If you need help on form:
http://rgdirections.lpi.nsw.gov.au/land_dealings/dealing_req…
(Take necessary ID documents, title/s etc )
But why??
Duty is not paid at LPI, it is paid at OSR. Not sure if OSR even does over-the-counter type service anymore.
Yeah they do, at Parramatta. But yes this is correct, it must be paid to OSR or an OSR agent.
How much is the property worth
Die.
That's the cheapest way.
Otherwise you'll be up for stamp duty, capital gains (based on the market value at the time of transfer, not the price you are giving it away for). If you leave it in your will then you can avoid these things.
Haha, jokes apart I agree this is the best option for cheapest way to transfer the property!
Just watch this video and you'll be right to go
https://www.youtube.com/watch?v=ecGHMv77WM4
what could ever go wrong
I have spoken to few solicitors and I will have to pay stamp duty + CGT and it is way too much. So I'm thinking about doing "Will" and put it under my friend's name.
But I'm not so sure how does "Will" works exactly! I have been looking at Wills at NSW Trustee & Guardian website and it say's that NSW Trustee and Guardian will charge commission rate reduces as the capital value of an estate: starting at 4.4% for the first $100,000 and decreased by 1% for every extra $100,000.
Plus:
A monthly account keeping fee of $11.00 (incl. GST) is charged from commencement to completion of estate administration (currently it takes 6-9 months to administer a simple estate). If required, for the investigation and lodgement of tax returns a minimum fee of $275 (incl. GST) up to one hour applies, plus up to a maximum $220 (incl. GST) per hour for extra hours required to finalise outstanding income tax issues, and if the estate earns sufficient income to warrant lodging a trustee tax return. There are also out of pocket expenses for postage, phones and photocopying. Charges also apply if additional work is required for resolving disputes.
That's too much if the gov going to get at least 4.4% + all other fees!
Anyone has experience with wills, please share your experience.
Will means they only get the property when you're gone
I think the trustee cost you mention is only if they have to manage your estate. If you name an executor to look after the estate then you just have pay to register the will. If the executor is someone that has agreed to do it then it cost nothing.
But there are still taxes to be paid which the executor can pay from your estate.
If you are trying to avoid land tax and not give it to friend then you should only transfer half to your friend as the combination of you + friend counts as different entity for land tax purpose. You pay half as much taxes doing the transfer.
Next thread: "How do I fake my own death on the cheap?"
this thread is getting weirder by the day, the fact you are leaving the property to your friend in your will doesn't really mean anything as nothing happens until you die. So assuming you are a youngish chap, that could be 40-50 years away or your friend may pass away earlier than you. If you were genuine about giving the property to your friend out of friendship, he would be pretty pissed now i would think, furthermore, you can change your will anytime in the future, so definitely no security/certainty for your friend he will end up with anything.
Mate. there is only one answer…DROP DEAD !
BTW. If you are dead none of this matters. Stop worrying about this and just get on with your life.
Just in case this thread is for genuine purposes: OP, you're being criticised as some of these questions seem to indicate a lack of understanding of some basic concepts.
Interestingly, I had a similar situation recently, where someone was finding it difficult to understand the concept of a "will" because of language barriers. Once they understood a will was a testament, it was smooth sailing.
If you're genuinely looking to gift a property to a good friend, and consider doing so through a will/testament, then you either update your current will (testament), or, if you don't have one, you go and see a lawyer to draft one for you.
If you have more assets than the property you're giving away, it's probably worth considering what happens after your death, who (family, relatives, friends, neighbours, charities, etc.) gets what (after your death), and have that reflected in a will/testament for your (and everyone else's) peace of mind.
There are a number of websites around - see links here: http://www.australia.gov.au/information-and-services/family-… for the basic concepts associated with a will.
I suggest you consider carefully who you are appointing as executor, as many free and cheap wills will be - as you have seen- seeking to provide a revenue stream for their supplier. If you know what you're doing, you can amend such free/cheap wills to remove those provisions, but I'd say it's worth - again - paying someone skilled (a lawyer) to get a will drafted properly for your circumstances.
If you go down this route with your friend, make sure they don't have any reasons to hurry up your demise.
Finally, if your reasons for gifting that property are less than honourable, and I spent all this time writing the above in waste, well…karma will get you!
Thanks for taking the time and explaining the definition of "Will" and the executor. I'm totally aware of it and I honestly prefer to give it away as gift but I don't wish to spend money on CGT and stamp duties therefor I have decided to do a will.
I will contact a lawyer to draft a will for me.
But my question here, if I pass away, how long does it take for my friend to get the property? Is my friend going to pay any taxes, fees…etc to the Gov?
Can typically be a year before your friend will physically own it, as long as the house wouldn't have to be sold to pay other beneficiaries. If you friend is the sole beneficiary, then he will unlikely have any problem continuing to live in the property until he/she physically owns it.
Have a search for 'eligible beneficiaries' though - these are people in your family who can contest your Will, and will be especially successful against someone not related.
if you do it without professional help (lawyer / conveyancer) you will f**k it up and the costs to make it right will be more than if you did it properly in the first place