Transfer of Land Contract - Sale by nomination

LPlanterina on 02/11/2021 - 15:34

My partner and I put a deposit on a block of land in Northern suburbs of Melbourne with intention to build our first home in Feb this year. The land is currently untitled and is expected to title around April 2022. In the meantime, our circumstances have changed as we have had to move interstate. We are now thinking of selling the land.

I was wondering we can get any advice on if we should sell the untiltled land (since prices have soared since we put our initial deposit) or wait until the land is titled. If we sell untitled land by nomination on profit, at what stage the buyer pay us? At the time of nomination or at time of titlement of the land?

Any advice from your experience would be highly appreciated! :)

Financial

Comments

  • Harby7 on 02/11/2021 - 15:48
    +3

    You should seek the advice of a solicitor.

    • Planterina on 02/11/2021 - 15:52
      -1

      You are right, that is on our list. Before speaking to solicitor, we wanted to get advice from someone who has experience and has insights into the process. Thanks anyway!

  • geek001 on 02/11/2021 - 15:51
    +5

    If it is not costing you anything, why not wait till it is titled, then sell it? We all know land prices only go one way in the long run.

    • deme on 02/11/2021 - 16:23
      -2

      Long term…

    • Planterina on 02/11/2021 - 18:15

      We are trying to avoid to wait till the titlement since we will have to take a loan to settle or pay interest to the developer, if we do not find a nominee in time. We are currenlty exploring options to nominate sooner considering the current prices in the market.

  • djkelly69 on 02/11/2021 - 16:37

    Once the land is titled, you are expected to settle pretty quickly I would assume? So likely you would have to settle yourself first (to avoid interest from the developer) and then offload once you are able to find a buyer, get them to exchange, etc.

    In that case, your names would go on the register as owners (no matter how short the time you own it), and you could possibly be no longer eligible for a range of first home benefits. I am not sure, but you may be able to avoid CGT in that scenario as your intention when you purchased the land was to build/live on it.

    In the other case, if you are essentially parachuting a new buyer into your contract, you shouldn't lose access to first home benefits, but I think you would likely be liable for CGT on the whole of the profit you make.

    In short, see a solicitor and accountant/tax advisor ASAP.

    • Planterina on 02/11/2021 - 18:23

      Thanks @djkelly69!

  • omguleh on 02/11/2021 - 17:59

    Did you put down “and/or nominee” in the contract of sale next to the purchasers name?

    • Planterina on 02/11/2021 - 18:22

      No. But there is an option in the contract to add a nominee seven days before settlement.

  • bemybubble on 02/11/2021 - 21:18

    Buyer pays for it at nomination.

    Don’t wait for it to title as you’ll cop stamp duty

  • miwahni on 02/11/2021 - 22:53

    You can't sell the land until you own it. Nominating another buyer simply means that someone else (the nominated person) buys it instead of you. Not sure how you negotiate getting your deposit back from the the nominee but from my understanding that's the most you'll be entitled to, regardless of how land values have moved.

  • belesci on 23/03/2022 - 20:44

    Hi mate how did you go with the land?

    • Planterina on 16/05/2022 - 14:51

      Hi, sorry for late response. We have decided to keep our land and build our first home on it. :)

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