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Switching buyers before settlement

By in Buying

Have you found a beautiful house with a deal too hard to walk away from? If it’s not exactly the right home for you, it may be the right one for someone in your family. Or in other instances, you may want to add your partner’s name onto the title.

Be careful!  Most property transfers in Western Australia attract state government tax known as transfer duty (formerly stamp duty) based on the the value of the property. Any change in the identity of the buyer raises the possibility of double transfer duty – a very expensive problem! (see What’s in a name).

The Office of State Revenue of WA will allow duty-free transfers between family members in some circumstances – known as a substituted purchaser.

What does the law say about substituted purchaser?

A buyer on a contract may be substituted with another before settlement, with no extra transfer duty payable, provided the original buyer shown on the contract and the substituted buyer are related for transfer-duty purposes.

Are we related?

If the original purchaser is an individual, the following persons are related for transfer duty purposes:

  • Parent
  • Children
  • Siblings
  • Wife/husband or de facto partners
  • Parents of wife/husband/de facto partners
  • Children of wife/husband/de facto partners
  • Siblings of wife/husband/de facto partners

We can help

Get legal advice on the Contract before you sign it or on any proposed substituted purchaser arrangement. As your independent settlement lawyers, contact us to book a 30 minute consultation ($198) or a 60 minute consultation ($385).

Once you’ve had advice and decided on a course of action, your file manager at Flat Rate Settlements can prepare any necessary substituted purchaser documents and lodge them at the Office of State Revenue.

 

 

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