Hi, I want to gift my residential unit in NSW to my son. The home loan is fully paid and the mortgage is already discharged. I want to do the transfer myself as I feel there is not much for the conveyancer to do. Is it possible to do it myself? If so, could somebody guide how to do it? Thanks
[Matter Closed] DIY Family Transfer - Mortgage Already Discharged
vin2 on 19/09/2024 - 11:24
Last edited 20/09/2024 - 16:31
Last edited 20/09/2024 - 16:31
Comments
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Since it is my main residence and it will also be the main residence of my son, there is no capital gains tax involved. I have confirmed it with ATO already.
So you both going to be living in it together? You really should consider what this transfer will mean for you both and your entitlements/obligations.
It's his PPOR. He can give it away or sell it with no CGT implications.
@AustriaBargain: Yeah boomers got their houses for free back in 70s or pay only peanuts like $50k, and now selling it for $2m cold hard cash. its what they called born with silver spoon in their mouths.
@RTX9090Ti: If you’re born into a family that owns a bunch of houses, you’re basically set from birth. You’ve already “achieved” what takes regular people born with nothing a lifetime to earn.
Damn. Must be good to be a boomer. No wonder boomers only ever talk about selling their house and what they'll do with the money, it's like sitting on a lottery ticket.
It is great to be a boomer, especially since retiring when I pay myself twice my engineering wage and don't pay tax.
My young adult kids love it too. I paid for their higher education so they wouldn't have a student loan, I give them $1k-$2k each every month to buy shares, I keep their car (that I gave them) maintained and they never pay for anything when they are with me.
It's wonderful reaping the fruits of my labour after 45 years of full time work and 7 years part-time before that. It's a great reward after the 60-80 hour weeks, the night school to get my qualifications, living a frugal pre-FIRE lifestyle before it was a thing, having cars that were so crap we had to hire a car to go on holidays, both parents working full time and juggling work and child-care.
These are sacrifices that all generations have to make to get ahead. Every generation has it tough in some manner.BTW: I've only ever owned 1 house at a time as have most of my cohort but I have owned 5 houses in total. Each one bought, renovated over several years and eventually sold so we could move on to the next POS.
Or maybe it was good to be like my Dad and live through the depression and serve in WW2 and be discharged with such horrific medical issues that Mum was told not to marry him as he'd die before he was 35.
You are a grumbling curmudgeon with an ongoing martyr complex. Why not get over yourself, get some qualifications and do some work and get a brighter outlook on life. The glass is half full.
@brad1-8tsi: I'm actually thinking of moving to Europe when I can. Find a place where land is cheap and internet speeds are good. A place where everyone knows what's good for them.
I'm actually thinking of moving to Europe when I can. Find a place where land is cheap and internet speeds are good.
Apologies but I've made the assumption that you are from Austria. You certainly won't find cheap land there.
My ex is Austrian and I've been there many times visiting relatives. They were paying AUD 800k for a house plot near Weiz about 15 years ago. The house building costs were double-triple what it costs here.
I guess some of the old Eastern Block countries might be cheaper or some of the mountain villages in Italy or Greece.
A place where everyone knows what's good for them.
What does this actually mean?
@brad1-8tsi: Kick it down a notch and think about it from the perspective of a millennial with poor parents. Still working 60-80 hour weeks, but unlikely to ever be able to own a home, will retire at 70+
Going without anything and saving saving saving the deposit amount to hit 20% just moves further and further away. For my city, that amount is currently at $240,000 - Since when is a deposit suppose to be twice your pre-tax annual income?
perspective of a millennial with poor parents.
I wouldn't class myself as rich. I was a motor mechanic that did extra study and eventually became a barely competent mid-level engineer with a knack for scheduling, building good working relationships with my contractors and not taking forever to make a decision. I've also had side hustles since 10 years old and taught myself how to renovate houses when I became a home owner because I couldn't afford tradies.
My parents were definitely not rich. Mum was a hairdresser and Dad a mid-level public servant when public servants were paid a pittance.
I find Mr AustriaBargain so negative on an ongoing basis and with a "victim mentality" when others just get over it and get on with it.
It's the stamp duty where you'll get stiffed.
wouldnt there be stamp duty as well?
If its an investment apartment then capital gains tax will apply as well as stamp duty.on the transfer.
However if its their son's first property purchase then maybe no stamp duty will apply on the transfer…only capital gains tax.OP is better off letting thier son stay there and pay all the bills as if they owned the place.
Then when OP leaves us its transferred free of charge.To save money OP should use a "conveyancer" rather than a solicitor.
They are not that expensive in comparison.
OP can shop around conveyancers and get a fixed price for the transfer.
Ignoring any financial considerations which I would strongly recommend you get advice on (if you haven't already), you can't do paper transfers in NSW anymore.
So at a minimum you will need to engage a solicitor or conveyancer to prepare and complete the transfer of the property in PEXA, as well as the associated verification of identities, etc.
"I want to do the transfer myself as I feel there is not much for the conveyancer to do"
……Immediately askes an internet forum how to do it.
It's simple, there's no trick to it, it's just a simple trick.
Sorry, ChatGPT is wrong on this one for a number of reasons.
As it is for pretty much everything.
ShatGPT
.
Have you tried ChatJVt??
ChatGPT is like your typical whirpool/forum commenter - gives wrong information with confidence
What specifically is wrong with this advice? Just curious as it reads pretty confidently lol
- Paper titles are not used in NSW anymore
- You can't lodge paper transfers in NSW anymore
- When they did allow paper transfers, they didn't require witnessing by a qualified witness such as a JP or solicitor, only someone who had known the signing party for at least 12 months
- You have to prepare a Notice of Sale/eNOS to go with the transfer for registration
- You have to have a transfer assessed for stamp duty and have the duty paid prior to lodging it with LRS for registration
- I don't believe you could ever lodge a transfer online, other than through PEXA
@Smol Cat: Yeah it is not something many people would know.
The steps it lays out are broadly correct in how you go about doing a transfer, but it just lacks the detailed knowledge which probably only those who do that sort of work would know.
Just verbally agree and shake on it that it now belongs to your son.
Paperwork is overrated and not worth the fees.
I appreciate what you said, but paperwork is required in my case for a personal reason. Since it will be a first home for my son, he doesn't have to pay stamp duty.
Have you got a link to where it says first home owners don’t pay stamp duty?
I’m pretty sure that is only some specific circumstances, not a universal rule
Probably reviewed the guidance from Revenue NSW - First Home Buyers Assistance scheme and concluded they were eligible.
Why would he have to pay tax on a gift?
@EightImmortals: You pay stamp duty on the dutiable value (unless exempt).
Does not matter that it is a gift.
@happydude: Can you link to the official declaration of that particular bit of scummy thievery?
I mean 'stamp duty' is a huge scam as it is but if no money changes hands then in what sane world can they justify extorting money from people? If I gave you some tomatoes would these creatures demand one of us hand over GST as well?(Edit, I did find some drivel about CGT on the ATO website but nothing about stamp duty. https://www.ato.gov.au/individuals-and-families/investments-…
The relevant part: "If the property was your main residence, you can claim the main residence exemption from CGT."
This one is a more to the point: https://houseofwealth.com.au/estate-planning/what-you-need-t…
But seems a bit ambiguous in it's wording.
Is Gifted Real Estate Taxable?
Australia doesn’t have a federal gift tax for:Cash gifts
Charitable gift donations
Immovable property
However, real estate 'may' be a taxable gift. Depending on the type, location, and value of the property, the new owner may be liable to pay:Stamp duty
Land tax
Absentee owner surcharge
Vacant residential taxThe new owner’s tax obligations depend on the relevant state’s tax laws.
Further down they state:
"Australian states levy stamp duty on a transfer, even if the property is a gift. Contrary to popular belief, stamp duty is not a one-off payment. Under tax law, buyers need to pay stamp duty on all property deed transfers.
Stamp duty falls under state tax. For example, in New South Wales and Queensland, you can transfer an interest in property to your spouse without paying stamp duty. You also don’t need to pay duty if, after the transfer:You and your spouse own the entire property as joint tenants
The property is your permanent place of residence
Before beginning the transfer process, it’s best to seek financial advice to learn more about the laws in your state.")I suggest OP finds a good solicitor/accountant to see how to avoid getting ripped off. I don't see the relevant distinction between 'spouse' and 'son' in this case but solicitor could advise on that point.
@EightImmortals: All covered here https://www.revenue.nsw.gov.au/taxes-duties-levies-royalties…
See
You must also pay transfer duty when you acquire land, or an interest in land, without buying it. For example:
a declaration of trust
a gift, or
a transaction effecting a change in the beneficial ownership of a property.And
You must pay transfer duty based on the property’s sale price or its current market value, whichever is higher
@EightImmortals: OP suggests son is qualifying first home buyer who would be exempt from paying stamp duty (although valuation, etc, is still required essentially so they can ascertain how much duty they are missing out on).
I mean 'stamp duty' is a huge scam as it is but if no money changes hands then in what sane world can they justify extorting money from people?
Because people would rort it.
Instead of buying house with money, I would trade it for gold bars. Then no money changes hands I don't need to pay stamp duty!!
That is why it's calculated on market value, not the actual transaction.
@happydude: So what if they did, it's their property.
Do you believe the government is short of money?(p.s. gold IS money, or at least it used to be. Pretty sure it still has a fiat value that can be calculated. :) )
he doesn't have to pay stamp duty.
You don't pay when you inherit the property either.
That’s from a deceased estate. OP seems very much alive
What Is that personal reason?
Elder abuse
OP hit a Ferrari and does not have insurance.
This also keeps it safe incase the son ends up with a gold digging partner.
But not if OP ends up with one
Maybe that's why they want to transfer it to the son. They'd need to have done it beforehand as the family court has the power to reverse such a move after the fact.
or if the OP is getting chased down for debts
Must be nice to own property in Australia, it instantly makes you a 10 these days.
OP is getting ready for AgedCare assessments in 5-7 years time. Well done.
Absolutely not. there is another strong personal reason.
another strong personal reason.
Elder abuse ?
Is that the thing where you block your ears during the aoc speeches at the primary school assembly?
Suggest it's likely another family member that might have a claim down the track…
defacto
hi
i literally did this with my parentsget its market value by a valuer for purposes of stamp duty
fill out an electronic notice of sale, for $1,
make a paper contract saying you sell to your son for $1
fill out some paperwork - i forget the name - to go to land title office, queue up and tell them the valuer value and give them your stamp duty cheque.something like that.
the end
nb: i did this while also transfering the mortgage to me. totally possible without a conveyancer
When was this? Another commenter said it's no longer possible due to a requirement to use PEXA
2015
Doesn't this make it a Sale technically instead of a Gift?
A sale, or a gift, it all attracts stamp duty.
Sell it for NIL or sell it for $1, land office really doesnt care. It just wants its stamp dutyIf you're going for the pension, any sale below market value results in the difference being considered as an asset-countable value even if you dont have it anymore.
I don't know your personal circumstances, but I hope you have thought it out before committing to this. Have you discussed the risks if anything were to happen to your relationship between you and your son. Will transferring the property to him cause any undue burden on you or him? Will your family lose out if your son breaks up from a future marriage/defacto relationship, etc…
Sometimes, it is actually better to keep the property under your name, than it is to transfer it to him. You are a different legal entity from him, and it could shield both you and him if things go south.
With that out of the way, I believe you will need to use a conveyancer for the title transfer to value the property so when the transfer is lodged with the NSW Land Registry Services, Revenue NSW knows not to charge your son transfer duty (formerly stamp duty) since the value should be under the $800k threshold as you are suggesting. There is the added advantage that the conveyancer is much less likely to screw up. Fixing a title mistake can be a very expensive and drawn out process and you don't want to be dealing with that on a ~$500k+ transaction.
Penny wise, pound foolish is never a good strategy.
What a good Dad you are. My dad left me a clock and a bunch of bills to pay, and nothing else.
Did you look inside the clock for any hidden fortune?
Maybe he didn't have the time to look
There's always a second chance.
Only time will tell
I doubt it. It's a clock, not a banana stand.
Was it a large font clock "with accessibility features" that NDIS rorters sell for $700? Could be some coin in there for ya
Why would you pay your deceased father’s bills?
https://www.revenue.nsw.gov.au/taxes-duties-levies-royalties… all the sub-sections here cover what you need and as above you will need someone to lodge electronically for you
https://www.revenue.nsw.gov.au/taxes-duties-levies-royalties…
can I have it i will help you with the process
It's true, I gave my house to this guy too. He will transfer it to my child one day.
yes all properties will be transferred to children once i am done renting them out on airbnb
You need a solicitor/conveyancer.
two things are needed
1: valuation showing the market price, so that the Govt does not feel shafted were you to declare a $1 mill property as $100k to pay less stamp duties
2 . Transfer going off this , showing the transfer of ownership from you to your son.Transfer is then lodged showing nil or whatever consideration and lodged with the LTO for change of ownership.
Also ask your accountant for Advice , not "the ATO"
So No, not something simple enough for you to " DIY" , possible "Yes", Easy "No"
An alternative is to gift him (or sell for nominal amount) a call option to buy the property for $1 with expiry date next X years.
The advantage of this is that it doesn't incur any stamp duty; it will when your son exercises the option and purchases the property.
The other advantage is that it's a hidden asset (if you and he keeps your mouth closed). E.g. future relationship breaks up and partner wants half of the assets, the property is still in your name.
Easier way is for him to just take out a 2nd mortgage with a set value or caveat for asset protection.
This isn’t dodgy at all
The fact that the Govt requires you to lodge the transaction digitally !?
What a lot of negativity here. Try giving this place a call and pose the questions raised above.
https://www.diyconveyancingkits.com.au/product/new-south-wal…
If you were buying or selling at arms length then you may feel more confident paying for a solicitor or conveyancer. From your point of view transferring should be no risk. From your son's point of view, he gets the benefit but accepts any liability. Presumably you would know of any such liability (Mascot Towers comes to mind).
Kit is a waste of money for a family transfer.
PEXA Agent (Australia wide): www.networklawyers.com.au
Are you trying to hide assets in your son's name?
if your a sovereign citizen, you can do ANYTHING.
anyone can do anything, just don't complain when the consequences catch up with you
Just throwing this out there in case it is a viable option.. Without knowing to much about your reasons, or your/your son's financial situation, it is hard for the community to give better answers, but a company/trust setup could be a benefit in some circumstances.
You would need to consider the obviously cost and tax consequences now and in the future, but something worth considering.
the laws have changed significantly in order for these things not to happen with little to NO payments etc made to gov.
seek legal advice first as you will be shocked.
Thanks all for your comments. As many of you said, it is not DIY. A conveyancer is a must for title transfer.
There is no elder abuse. My son is my best friend.
I consulted one more lawyer yesterday about my personal situation and he advised me a better solution. So I have abandoned the plan of gifting.I consulted one more lawyer yesterday about my personal situation and he advised me a better solution. So I have abandoned the plan of gifting.
I am wondering, what is the better solution?
"You know your assets aren't calculated towards your eligibility for a pension?"
So I have abandoned the plan of gifting.
Please edit your original post so we aren't wasting our time replying.
Yeah definitely more beneficial to keep it all to yourself.
What's the better solution?
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I'm no financial adviser but I'm guessing there's gonna be a hefty tax bill which won't make it worth it