An article by Alex Poletto

Whilst there is a myriad of reasons why a transfer occurs the most common (we find) is for succession purposes or asset protection. Although the process to transfer is straightforward these forms of legal transactions still need to be handled carefully.

So, what do you need to know before transferring property? Read on, where we discuss what a transfer is and how it may affect you along with the risks of doing a “DIY job”.

What does a property transfer mean?

A property transfer means a transfer between parties to change the interests of, or ownership in, land. For instance:

• Adding a new person
• Removing a current person
• Swapping out a person
• Changing the interests of a person (e.g. from a joint tenant to a tenant-in-common or vice versa)

Hang on, what is a tenant-in-common or a joint tenant?

Tenants-in-common or joint tenants is the way owners (multiple) of land record their interests. Each interest carries different pros and cons.

While there is no default for how owners should record their interest the most common specification (we find) is joint tenants for couples and tenants-in-common for friends/investors.

If a recording of interests in land is as tenants-in-common this will mean each party can more freely deal with their interests; they can also record their interests unequally. Unlike interests recorded as joint tenants there is no automatic transfer upon the death of one owner to the other (survivorship presumption).

A recording of interests in land as joint tenants means, firstly, interests must be recorded equally. It also means upon the death of one joint tenant their interests go to the other surviving joint tenant(s) automatically (survivorship presumption). Whilst this can be useful for couples, as it can bypass disputes under a Will, it creates a more rigid process.

There are also some instances where interests simply cannot be registered as joint tenants.

What about stamp duty?

In Queensland, transfer duty (or stamp duty) is payable on property transfers unless an exemption or concession applies. If someone can meet an exemption or concession, then the transfer will be duty free (or concessioned).

Some examples include:

• Matrimonial reasons
• Tenure change (joint tenant to tenant in common and vice versa)
• Spousal / de-facto transfers

Each exemption/concession carries different thresholds and requirements.

Why I shouldn’t DYI

Although a DYI job can save money upfront the ramifications if not done correctly can be costly and hard to reverse (sometimes impossible). Accordingly, ensuring property transfers are completed by a experienced lawyer not only limit potentially avoidable errors it also avoids unintended consequences or costly “document catch-up” action.

Some unintended consequences include:

• Loss of exemptions/concessions
• Triggering CGT
• Triggering default under loan agreements
• The change in tenure being invalid
• Requisitions for incorrect forms or details

How can we help?

At Bellco Law, we frequently work with our clients to assist and action property-based matters. Our lawyers have years of experience dealing with all varieties of transfers. Our experienced and friendly team will walk you through the process from start to finish. For an obligation free quote send us an email at admin@bellcolaw.com.au or call us.