Question: My father owns one-third of a property and wants to transfer his share to his two sons. What steps are required to transfer his share into his sons’ names and what are the fees and costs involved?
Answer: When transferring property between family members, your conveyance or solicitor is able to act for both parties, that is, in this case, for both the father and the sons. This arrangement assists in simplifying the transfer process as well as reducing fees.
It is important to ensure that the transfer of ownership is an arms-length transaction, in particular for stamp duty requirements. The New South Wales Office of State Revenue (OSR) administers the Duties Act 1997. Under this Act, a transfer duty liability is created when a person enters into a dutiable transaction relating to dutiable property in NSW.
Your conveyance or solicitor will prepare a transfer document noting the title details, agreed price and details of the transferor (father) and transferee (sons). An original valuation no more than six months old, carried out by a certified valuer as opposed to a real estate agent, is required to accompany the transfer document when stamp duty is paid to the OSR. Stamp duty is calculated on the higher amount of the valuation amount and the agreed price for the purchase of the property. The proportion of the acquisition, in this scenario, one third, is payable on the stamp duty amount. Stamp duty is required to be paid before registration of the transfer.
If there is an existing mortgage on the title, the mortgage will be required to be discharged on registration of the transfer. If the transferees have a mortgage then their mortgage will be registered after the discharge of existing mortgage has taken place.
Your conveyance or solicitor will provide you with a written costs agreement before undertaking any work and should set out the related fees and costs. Legal fees can range from $200 to $800. Registration fees payable to Land and Property Management Authority (previously known as Department of Lands) are currently as follows:
Discharge of Mortgage: $97.00
There may also be related fees regarding the mortgagees and you would be wise to check with your bank.
Nevertheless, as every situation is different, we recommend you seek legal advice from your conveyance or solicitor.
- Answer provided by Geri Forsaith, Sydney Property Conveyancing
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