Transfers

<html><body>
Dear Margaret,
I wonder if you can help I don't really know we're to start, we live in South Australia and my mother wants to transfer her home over to me.
 I have been living and caring for my mother for 16 years after my father died. What would be the cost to transfer the house to me? What do I need to do?
Ellen 
Dear Ellen 
When someone thinks of property and tax, they normally think about the relationship that those two have for investors, and the impact of taxation rules on property investors. 
However there are many aspects of tax law which become applicable to owner occupiers or owners of property which are not rented out which are often overlooked. This can create a real tax nightmare at a later date.
It may seem that transferring a home into the name of a child is a simple matter, however it can have far reaching consequences which must be thought through before it occurs.
The first consideration is stamp duty. Where a family transfer occurs, the only transfer which is exempt from stamp duty is between spouses.  Generally, a transfer from a parent to a child will attract stamp duty, levied on the market value of the home, even if no money changes hands on the transaction.
The second consideration is tax.  While there is no tax to pay on this transfer, since it was your mother’s principal place of residence, in some cases of family transfer, where the property was an investment property for the parents, capital gains tax responsibilities can pass to the child along with the property.
In your case, being in South Australia, the transfer of the property will attract stamp duty pursuant the Stamp Duties Act 1923 (SA). As you are receiving the property, this must be paid by you. The stamp duty payable on the transfer will be charged ad valorem, which means that it will be charged based on the market value of the interest transferred. So the amount of the stamp duty payable will depend on the value of the property.
You can get a lawyer to draw up a document which allows this transfer – a contract for sale should not be necessary, and that lawyer can also arrange for the transfer.  So, in addition to paying the stamp duty, you will pay for the legal costs of both drawing up the agreement to transfer the land plus any government and statutory charges applicable in your state for the title transfer.
Have a property question?  <a href="mailto:%20&lt;script%20type='text/javascript'&gt;%20/n%20&lt;/script&gt;&lt;script%20type='text/javascript'&gt;%20%20&lt;/script&gt;This%20email%20address%20is%20being%20protected%20from%20spambots.%20You%20need%20JavaScript%20enabled%20to%20view%20it.%20&lt;script%20type='text/javascript'&gt;%20%20&lt;/script&gt;" target="_blank">Ask Margaret!</a>
</body></html>

mlomas-KC9MUPZ6Ca

Transferring a property to a sibling: Ask Margaret

<html><body>
GUEST OBSERVER
What is LPI and what is being privatised?
A1 Prior to 1st July 2016, LPI, which stands for Land and Property Information, was made up of the former Land Titles Office and a number of non-profitable government agencies including the Valuer General’s and the Land Information Centre. The Baird Government is only privatising the unit formerly the Land Titles Office, the creator of the “Torrens Title” because this is the only part of LPI which is profitable. The other agencies have gone back to being supported by the public purse which makes no sense at all!
Q2 What sort of a profit are we talking about?
A2 Last financial year, (2014-15) the titling and associated services produced a $47 million profit sufficient to fund 400 teachers or nurses in the State’s schools or hospitals so by selling the title service, the Government is after a one off sugar hit with consequent loss of long-term revenue.
Q3 Why should the ownership of the Torrens title system remain in government hands?
A3 What is at risk here is the simple Torrens title Government Guarantee of ownership provided by an independent government agency which is at the heart of sound economic development in New South Wales
It is every home owner’s dream to hold the Torrens Certificate of Title issued by the Titles Office to prove ownership of their own property.  
This single document shows what land is owned by reference to a survey plan, who owns the land and what affects it and provides the security required by purchasers, lessors and lending authorities for the purchase or lease of land, homes and businesses.
There is a very real potential for conflict of interest if a commercial organisation such as a major bank, insurance company or land title data provider, owns the title.  The privatised model would eliminate independent Government operation of the title system, reduce community trust and open up opportunity for corruption in land transactions.
Q4 Surely a privately run title system would provide cheaper conveyancing for the average citizen, wouldn’t it?
A4 Certainly not! If the system is privatised, the Government Guarantee currently protecting ownership will slowly disappear.  There is no doubt the public and banks will lose confidence in the Guarantee once the current checks and balances are reduced and there will be an inevitable shift to private insurance.
The impact on costs of conveyancing cannot be overstated.
Quotations have been obtained from 1st Title, a subsidiary of First American Financial Corporation. 1st Title calls this their “Property Risk” or “Title Insurance” which, according to their web site, “protects you against legal risks that can threaten the ownership of your property, or affect your right to occupy and use your land”.  They say:
“These risks include:
<ul>
<li>boundary issues</li>
<li>fraud and forgery against your certificate of title</li>
<li>unregistered rights of way and easements</li>
<li>“adverse possession of another person against your property.”</li>
</ul>
These “risks” are already bundled in the existing State guarantee of title!
For a property valued at $1.4 mil, the premium is $989.18.  On lodgement figures for last year, if we look at transfers alone, 212,982 this would place an additional impost on home buyers in excess of $210 million annually.  If we add mortgages into the mix - 281,056 - $278mil, this figure rises to a staggering $488.6million.  Add to the mix, leases and mortgages of leases and other transactions which will attract insurance and the sky is the limit for the profits to be made by potential overseas investors.
Q5 The Treasurer has promised a more efficient title system under private ownership.  Surely a private owner would be more efficiency oriented wouldn’t it?
A5 Where does this evidence come from?  The New South Wales land title system is the envy of the world and has been adopted by many other countries 
The agency is recognised for its leading role in the provision of cheap efficient land registration services and has proudly developed:
<ul>
<li>The first ever automated title and land dealing registration system;</li>
<li>Electronic access to plans of land subdivision and dealings such as transfers and mortgages of land;</li>
<li>An electronic plan lodgement service; and</li>
<li>The Registrar General’s Directions for Plans, a bible for land developers and surveyors.</li>
</ul>
Over many years, the staffing structure of the Office has been streamlined and numbers reduced to the bare minimum required to deliver an excellent level of service.
The Government’s plan to privatise the Titles Office of the LPI will yield a short term monetary “fix” and no long term benefit to the public.  It makes no sense at all when you consider that the service is self-financing, with an excellent record of reducing costs and keeping fees to a minimum.
Q6 Surely privatisation of title agencies has been successful elsewhere around the globe?
A6 No!  This is the point.  The Government must be unaware of how truly revolutionary their proposal is because despite protestations to the contrary, we can find no evidence of successful privatisation/concession of this type anywhere in the world.
The Government quotes the Canadian experience as a successful example however, research discloses that in Ontario, Teranet (the concession holder) has a concession to manage the electronic lodgement system and sale of title searches, but the government still maintains registry offices with public servants checking dealings that don’t go through to registration automatically. The only other place it has happened so far is in Manitoba, another Canadian province that seems to have done it because it was in dire financial straits. Since that happened in 2013, a couple of other Canadian provinces, Alberta and Nova Scotia have decided NOT to privatise land titles as has the UK where there was a huge public backlash against the proposal.
Q7 Why are you opposed to the privatisation of the Torrens Land title system?
A7 Buying a home, whether it be a single dwelling, duplex or unit, is the single biggest purchase anyone is likely to make in their lifetime! Under our world class “Torrens” title system the land title is guaranteed by the independent scrutiny of the State Government. However once this system is privatised – sold to a bank or an insurance company for example – the government guarantee will be degraded - slowly replaced by title insurance – which will cost home owners many thousands of dollars extra for a less reliable service.
Q8 What will be affected in the privatised model?
A8 The trained personnel in LPI. It is this expertise that is being sold that will eventually be lost as the New Model doesn't allow for their continuation under Privatisation!
In preparing titles the LPI Plan Examiner is a skilled analyst who has the final say on whether the plan is in order for registration and title creation looking at the history involved before asking particularly, “What is the effect of the definition on adjoining properties?”  Titles created are for a “lot in a plan” and they form the base segment of the State’s legal cadastre.
This Plan Examiner and LPI Titles Officers requires sound knowledge of the survey process, legal matters related to plan and title examination, Survey Practice Regulations, road redefinition, Council requirements, Strata title legislation, Community title legislation, Railways Act on boundary determination, Pipelines Act and many other Acts &amp; Regulations.
Q9 The Government says the government guarantee of title will continue?
A9 This is difficult to understand as they will have limited or no control over the quality or accuracy of the documents and plans being registered. Legislation doesn’t ensure control, it only assists in prosecution. If the checks and balances are reduced or removed, slowly errors and inaccuracies will invade and corrupt the title database.
We have a world class Torrens Land Title system already – the best in the world – which makes a profit for the NSW taxpayer - in 2014/2015 the title system made a profit of $47m – enough for hundreds of nurses, teachers or police -  why would you put that at risk?
Q10 The Government says the State Guarantee is secure, what do you say to that?
A10 Tell that to the lady in Canberra who was recently de-frauded - her land title was stolen – and she lost her home. She had to sue the ACT government to get compensation. While this is very rare it happened. If this fraud can happen under a government owned monopoly – similar to that existing in NSW – how much more likely is it once the land title system is privatised? 
Q11 What should people do if they are concerned?
A11 Tell the government through your local member –enough is enough! Stop this crazy sell-off, protect the family home and don’t sell off the land title system.  Other countries have avoided this for good reason. Why would NSW want to be the first in Australia to introduce a lesser system?
Q12 What would you like to see happen now?
A12 We ask all our politicians in both the Upper &amp; Lower Houses to vote against the privatisation Bill - which will shortly be debated in the Lower House.  The Bill is the “Land and Property Information NSW (Authorised Transaction) Bill 2016” which in its title contains not a hint of its true intention to privatise the NSW Torrens Land Title System.
Further, the power to be vested in the Treasurer under the Bill is truly astounding: “The authorised transaction is to be effected as directed by the Treasurer and can be effected in any manner considered appropriate by the Treasurer”. 
Should the Bill make it to the Upper House we trust our representatives will kick it out taking into account:
<ul>
<li>The impact of the proposal on the integrity of the current Torrens Land Title System; </li>
<li>The loss of a guaranteed revenue source for future government; and </li>
<li>The impact on the cost conveyancing for our children and grandchildren resulting from the insurance which will inevitably replace the current State Government Guarantee of title</li>
</ul>
For and on behalf of the Concerned Titles Group.
Members of the Concerned Titles Group are:
Margaret Hole AM Solicitor, previously Examiner of Title at LPI Previously Judicial Officer of ADT Past President of the Law Society of NSW
Ian McCormack Former Senior Conversion Officer Old System Projects; Training Officer &amp; Plan &amp; Title Advisor NSW Land Titles Office
Noel Benham Former Manager Title Creation &amp; Assistant Director Title Creation Division NSW Land Titles Office
Tony Proust Fellow ISNSW Bachelor Applied Science (Surv) WAIT, Registered Surveyor &amp; Certified Practicing Planner
Barry O’Malley Fellow ISNSW Former Principal Surveyor of NSW NSW Land Titles Office
Bruce Langley Former Senior Conversion Officer &amp; Advisor Old System &amp; Crown Land; Project Liaison Officer to Gov Agencies NSW Land Titles Office
The group can be emailed for further information at: concerned.titlesgroup@gmail.com 
 
</body></html>

Transfers

Editor's Picks

Have something to contribute?

Developments

New apartments

New townhouses

News

Transfers

Editor's Picks

Receive the latest news stories to your inbox

Have something to contribute?

Developments

New apartments

New townhouses

News