The imposition of transfer duty, tax, or stamp duty varies from state to state. So, getting a business accountant on board who understands how to transfer duty impacts a potential transaction will make a massive difference to the net outcome for your family.
As transfer duty varies from state to state, a significant transaction can impact multiple states with diverse outcomes. So, with our connection with GGI Global we have access to lawyers in all states of Australia whom we can brief on your transfer duty requirements and how they will apply to you.
Further, the structuring of a transaction can also impact the stamp duty impact outcome. So, tax structuring must consider stamp duty impacts for long term strategies. For example, unit trusts are often done at Westcourt for their transfer duty and capital gains tax benefits – units in a unit trust (for real estate under $2m) can be transferred around family members without triggering transfer duty. Likewise, the separation of real estate away from a trading company within the business structuring options for a family in business can significantly help a family in business succession the operations later on and not necessarily incur stamp duty.
Engaging tax advisors with an appreciation of stamp duty across Australia are also relevant for providing goods and services tax. For many advisors GST is seen as a short-term financing transaction only. If GST is paid in one quarter, the ATO will refund the same GST in a subsequent quarter. However, that approach will overlook the stamp duty impact of a GST free transaction – stamp duty applies to GST and it can quickly become significant on buying real estate or a business. So, at Westcourt, our focus on legitimately structuring transactions to enjoy a GST exemption is often done, in part, to ensure that a lower overall cost of transfer duty is paid.
Another situation can be seen with the closure and creation of a discretionary trust. In exceptional cases, a discretionary trust can be shut down. The assets held within that discretionary trust, including real estate, can be transferred to the beneficiaries and enjoy a transfer tax free transfer. This same transfer duty outcome might also be appreciated if the asset is transferred to a self-managed super fund (with detailed advice attached to that position).
What is essential is that transfer duty does not exist by itself and coaching transfer duty applications, with the guide of a lawyer, is critical to execution of transfer tax strategy.
At Westcourt, we have one single focus – making family-owned businesses great. Our single market approach, proven level of holistic tax excellence including transfer tax, and national reach with the GGI network make us the natural choice for becoming your primary trusted advisor when looking at your tax affairs now and moving forward.
The amount of transfer duty that is payable in Western Australia (WA) depends on the value of the property being transferred and the type of property involved. Transfer duty, also known as conveyance duty or property transfer tax, is a tax that is levied on the transfer of ownership of real property, including land and buildings.
In WA, the transfer duty rate is calculated as a percentage of the value of the property being transferred. The specific rate depends on the value of the property and ranges from $1.90 for properties valued at less than $230 to a marginal rate of 5.15% for properties valued over $725,000. There are also different rates for specific types of properties, such as first home buyer concessions, and for transfers of shares in a land rich company.
It’s important to seek advice from a tax professional like Westcourt if you are unsure about the amount of transfer duty that is payable in your situation. The amount of transfer duty can be a significant cost in a property transaction, so it’s important to understand your obligations and to plan for the payment of transfer duty when you are buying or selling property in WA.
There are several ways to reduce the amount of transfer duty that you pay when buying a home in Western Australia (WA), including:
First home buyer concessions: If you are a first home buyer, you may be eligible for a concession on transfer duty. The concession reduces the amount of transfer duty payable and can result in significant savings for first home buyers.
Property value: The amount of transfer duty payable is calculated as a percentage of the value of the property, so reducing the value of the property can reduce the amount of transfer duty payable. For example, if you are buying a property with a large block of land, you may be able to reduce the value of the property by arranging for the seller to subdividing the block and only sell to you a portion of the land.
Timing of the purchase: Transfer duty is only payable when the property is transferred, so delaying the transfer of the property can reduce the amount of transfer duty payable. For example, if you are buying a property with a partner, you may be able to delay the transfer of the property until both partners are ready to take ownership.
Consideration of stamp duty: In addition to transfer duty, stamp duty may also be payable on the transfer of property. The amount of stamp duty payable depends on the value of the property and the type of transaction. Understanding the amount of stamp duty payable and taking steps to reduce the amount of stamp duty can result in significant savings in addition to the savings from reducing transfer duty.
It’s important to seek advice from a tax professional like Westcourt if you are unsure about the amount of transfer duty or stamp duty that is payable in your situation, and to understand your options for reducing the amount of transfer duty payable when you are buying a home in WA.