What’s in a name?
When it comes to buying real estate, a lot actually. Although buyer’s name may seem a simple part of the contract, many buyers get it wrong.
Getting a name wrong can cost tens of thousands of dollars in extra transfer duty. Take this example from our files (names changed of course):
Mr & Mrs Smith signed a contract to buy a family home, describing themselves as “John Smith and Emily Smith”. Before settlement was completed, the Smiths told us they wanted the Smith Family Trust to be the owner of the property. This raises a potential double transfer duty problem! The contract the Smiths signed will attract transfer duty at the usual rate. A transfer to the Smith Family Trust means an additional $40,000 in duty!
Although the Office of State Revenue of WA will allow duty-free transfers between family members in some circumstances, they will not permit a duty-free transfer to a discretionary family trust.
How can you avoid these problems?
Follow these tips:
- Choose the right buyer! If you want the owner to be your company or trust, the company or trust must be named as the buyer on the contract.
- State the full name, including middle name(s), of the Buyer. Don’t write Fred if your name is Frederick, or Sam if you’re Samantha.
- Include the full names of ALL buyers.
- If you’re unsure seek legal advice before you sign your contract. As your independent settlement lawyers, contact us to book a 30 minute consultation ($198) or a 60 minute consultation ($385). At your consultation we will review your contract, answer your questions and advise you if we see any areas for improvement.