Transferring a Property Title
Transferring and adding individuals to a property title or amending property ownership structures is something we see often at our office whether it be parents gifting or selling property to their children or by amending the ownership structure by adding someone such as a spouse to the title or even changing the shareholding in the property.
A transfer is completed usually in one of three ways as specified and elaborated below:
If a property title is to be transferred by gift, the titles office and bank must be provided with a new transfer of land document and relevant state revenue documentation also.
The formal transfer now commonly occurs online through PEXA where documents are lodged and exchanged by the relevant parties. Once the transfer is complete other relevant bodies such as council, water authority and owner’s corporation (if there is one) are notified and provided with a copy of the Notice of Acquisition reflecting the new ownership. A new certificate of title will be issued reflecting the name of the new transferee.
It is important to note that even if property is transferred by gift it may still attract stamp duty which is calculated at approx. 3% – 5.5% of the market value depending on your personal circumstances.
Selling Property to a Family Member or Acquaintance:
If a property is to be sold to a family member or acquaintance at a lower cost below market value, the transfer process is very similar to a conveyancing sale. A contract of sale is prepared by the vendors representative and provided for signing.
However, it is important to note that regardless of whether the property is sold at a lower cost, the stamp duty and capital gains tax will in most circumstances be charged at market value.
In most cases first homeowner stamp duty concessions do not apply if the property is being gifted or sold for less than the market value. Meaning that land tax will be calculated at market value regardless of whether the transferee is paying less for the property or whether it is being gifted to them.
Changing or Amending Ownership Structure:
If a title holder chooses to add someone to the title such as a spouse or decides to amend the ownership shareholding structure as it may be for tax efficiency purposes or asset protection strategies this can also be done.
The process entails a conveyancer or lawyer preparing a transfer of land document and relevant state revenue documentation and the transfer occurs on PEXA between the bank, titles office and lawyer/conveyancer where they are all virtually present and must sign off to formally complete the transfer. Once it is complete the relevant bodies would need to be notified of the change in ownership.
It is important to note that transferring or adding a spouse to a title in Victoria now attracts stamp duty unless the property is the principal place of residence of the spouses.
Depending on your circumstance and when the property was purchased determines whether capital gains tax (CGT) is payable on the transfer.
Please note that this is a summarized information about property transfers and that matters generally differ depending on specific personal circumstances. For further information with respect to property transfers or if you wish for our firm to represent you in the process. Please feel free to contact us on (03) 9942 7790 or email our Principal Lawyer, Nick Karolidis at firstname.lastname@example.org.