Should stamp duty affect how I purchase my property?
I am about to purchase a property and I have negotiated a loan from a bank for the purpose. The bank wants me to have a guarantor and they want the guarantor to be a co-owner of the property. My uncle has agreed to be my guarantor. I have just started a new job and I am hoping to reduce the loan enough in a few years to not need a guarantor anymore. I think I have everything covered but are there any stamp duty issues I should consider?
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Answer by Michelle Whitehead, Camden 2570 NSW
- There are several issues to consider in the circumstances that you describe.
- If you are buying the property as your first home and your uncle has previously owned property in Australia then having his name on title may disqualify you from the first home buyer’s exemption. This will not be a problem if you are buying an investment property, if you have previously owned a home yourself or if your uncle has not previously owned a home in Australia.
- Since you are planning to buy out your uncle’s share of the property in the relatively near future you should find out what is the lowest share of the property that the bank will accept him having. The higher his share the more stamp duty you will have to pay when you transfer his share of the property into your own name in the future.