How can you buy a property for $1.86m then sell it for just $1 ??

Kurrajong 16 August 2012 4

I noticed on Allhomes that a large number of units at 8 Wilkins St Mawson were bought on 12 Dec 2000 for $1.86 million each, and all were then subsequently were sold on 22 Feb 2005 (just over 5 years later) for just $1.

Perhaps its a movement of assets within a trust or holding company, but I thought all properties had to be sold at fair market value and the according stamp duty paid on that value.

Can someone enlighten me here as to what might have occured and whether its legit?

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4 Responses to How can you buy a property for $1.86m then sell it for just $1 ??
Sandman Sandman 8:06 pm 16 Aug 12

All the $1 sales are listed as a partial transfer so could just be a company name change or something along those lines.

joh8754 joh8754 6:19 pm 16 Aug 12

either adding or removing someone from the Title will result in a $1 ‘sale’. Possibly similar to ‘love and affection’ transfers, where one person on the Title dies, or the single owner leaves the property to someone in their will.

thatsnotme thatsnotme 5:56 pm 16 Aug 12

Duty is paid on the purchase price, or the market value, whichever is higher. So buying a property for $1 won’t save you on stamp duty.

niftydog niftydog 5:32 pm 16 Aug 12

My father helped me buy my first house many years ago – in order to remove him from the title many years later we effectively purchased his share for $1. We still paid stamp duty on the market value and all the ancillary costs.

This is quite common, though I’m not expert enough to explain it.

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