- This topic has 3 replies, 3 voices, and was last updated 1 year, 2 months ago by .
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We cannot source insurance for a 2 lot community title scheme (property on island off Brisbane consisting of two separate houses) – been through 3 brokers and contacted every insurer.
Therefore we are considering full subdivision so that the 2 lot owners each own their house and associated land. However I want to understand the stamp duty implications in Qld.
I would expect to only pay duty on the transfer of common property (currently held by lot owners as tenants in common under the CTS) not the lots themselves which are already exclusively held by the respective owners but I cannot find any cases/examples to support my position.
The reason I am concerned is that removing the CTS changes ownership converting the whole property (lots and common property) to freehold owned by the 2 owners as tenants in common. The subdivision then splits the property into two properties both held by the owners as tenants in common. Transfers are then registered for each of the two properties to transfer one owner’s share to the other owner resulting in each owner having full ownership of one property.
I’m concerned the stamp duty office won’t take into account that the house lots were already owned by the property owners under the CTS. Anyone come across this issue before?
- This topic was modified 1 year, 3 months ago by .
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This sounds like you would be terminating the strata scheme, and lodging a development application for a subdivision. It would be a good idea to talk to your council about zoning and minimum block sizes for houses, together with floor space ratios. A strata scheme may have been the only way to achieve 2 dwellings on the land.
You will also need to speak to a strata lawyer about your plans, and one who is a stamp duty specialist. The common property and private lots would be dissolved upon termination of the scheme, and so no transfers of these types of property. The underlying beneficial ownership of the land on which the houses are built remains the same parties but would no longer hold as tenants in common but would each hold a separate new parcel.
It could prove time consuming and expensive, so hopefully some kind of insurance solution may be found?
I believe strata law in NSW allows owners in two-lot strata schemes to insure their properties individually, provided the dwellings are not physically attached. This can be a problem when one owner has a house, contents and car insurance package and doesn’t want to give that up to take a combined insurance with the other lot. There is no compulsion for the two lots to have a shared insurance although that can prove more economical than standalone insurances for separate lots.
The opinions offered in these Forum posts and replies are not intended to be taken as legal advice. Readers with serious issues should consult experienced strata lawyers.
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