Sale of Land by Nomination - Is It Fair on First Home Buyers?

Lhfcbev on 23/08/2021 - 17:18
Last edited 23/08/2021 - 17:25 by 1 other user

I have seen few ads where people are selling land through sale by nomination at a price higher than the original contact price, effectively they will pay the 5% or 10% deposit at the time of land release and sign the contract. They will on sell it close to the contract settlement date at a higher price making a profit, some times they make 2 to 5 times the deposit amount they paid.

Do you think it is fair as many of the first home buyers are still struggling to buy the land and build their first home?

Poll Options expired

• 3
  Not fair
• 3
  I do not think about the first home buyer
• 34
  It is fair as they are taking risk

• 

  orangetrain on 23/08/2021 - 17:25

  +5

  Its as fair as letting houses get bought by investors that do nothing with houses.

  A vacancy tax is needed.

  • 

    Quantumcat on 23/08/2021 - 18:15

    There sort of is in the ACT, there's land tax for properties that aren't your principle place of residence, that still gets charged even when vacant. So it is expensive to leave properties vacant for too long.

• 

  MrHyde on 23/08/2021 - 17:31

  +1

  They are taking the risk. There is no guarantee that the price will go up. Just have to read on this forum itself on people posting that they can't afford to build and can't sell the land without taking a loss….

• 

  tsunamisurfer on 23/08/2021 - 18:12

  Don't these first home buyers have the same opportunities to purchase?

  • 

    Quantumcat on 23/08/2021 - 18:16

    Usually it has to be a new build and you have to live in it for a certain amount of time after buying it. Land on speculation wouldn't fit those criteria.

  • 

    hfcbev on 23/08/2021 - 21:07

    Yes, FHB have the same opportunities to purchase. In few popular estates, lots will be sold out in seconds/minutes after each release leaving out irregular and corner lots.

• 

  Almost Banned on 23/08/2021 - 18:15

  I don't know about other places, but if you do not actually name the nominee over here then you would be up for two lots of transfer duty…???
  So, you'd have to sell above the original contract price just to cover your costs.

  • 

    djkelly69 on 23/08/2021 - 21:15

    you would be up for two lots of transfer duty

    Same for NSW and ACT as well. I believe Vic still allows these types of 'or nominee' contracts where you can parachute the nominee in to the original contract at a later date without the original buyer incurring a duty liability.

• 

  ChunkyToast on 23/08/2021 - 18:26

  Standard invesment tinngggssss.

• 

  Drakesy on 23/08/2021 - 18:36

  +3

  When something essential becomes an investors plaything then you know that Australia has failed it's own population.

  Imagine if people could prepay for water and hoard it, restricting volumes and waiting for prices to go up effectively controlling the market?

  Oh wait, that happened in the Murray Darling…

  • 

    p1 ama on 23/08/2021 - 20:18

    When something essential becomes an investors plaything then you know that Australia has failed it's own population.

    I'm always curious when this point is made - do you actually have an exemplar of a city the size/scale of Melbourne/Sydney with similar opportunities, population, culture…etc. anywhere in the world where property prices are actually not "expensive"?

    https://www.globalpropertyguide.com/most-expensive-cities

    A lot of the major cities - e.g. Toronto, Paris, Amsterdam, Stockholm…etc. are all around the same price, if not more expensive.

    • 

      Drakesy on 23/08/2021 - 20:30

      But is the population living there better off for it?

• 

  DR-JEKL on 23/08/2021 - 20:09

  its been this way forever really!

• 

  RockyRaccoon on 23/08/2021 - 21:26

  +1

  And how do you make it fair?

  Give them the land?
  If a first home buyer gets it, whats stopping them from selling it for profit? Do you make them live there for x years?

  What about someone who has bought their first home and has to sell it at a loss because they lost for example their job. They cant buy back because they had already bought one, but they never made any financial gain out of it?

  Who decreed what fair is?
  Who decreed who gets their fair share?

• 

  thechemist on 23/08/2021 - 21:50

  +1

  In Victoria if it's a "Sale" then there will be CGT (for seller) and two lots of stamp duty just like any sale. So if you see all these ads on gum tree they probably want cash and they will put you as the nominee. Both buyers and sellers take the risk with ATO, SRO and potentially void the original land purchase contract.

  If it is a legitimate "sale" then lawyers would have to do contracts just like buying any other property. I doubt this happens and more often would be more like a cash job with both sides talking risk

  No legitimate real estate agent or lawyer wants to deal with this so that's where gum tree comes in

• 

  dixy on 23/08/2021 - 22:29

  Well first home buyers can also pay the 5% or 10% deposit at the time of land release and sign the contract and sell later. So, what makes you think of this question only in context of first home buyers.