A couple of years ago, our director and solicitor, Ivan Hung, was enjoying a family holiday on a cruise ship for Christmas. Sailing away from Sydney, with only a satellite for an internet connection was a blissful time to revive, rejuvenate and reconnect with family. The serenity changed when he received an urgent phone call from a client who realised that he had two days to avoid paying more than $10K in land tax for a home he resides in but purchased through a family trust.
It was 29 December when the client called with an urgent request to restructure the ownership of his property. Revenue NSW (the government body that governs stamp duty and land tax) determines land tax based on the ownership on 31 December each year for the following year. If you declare that your property is an investment, then there may be land tax to be paid.
The Family Trust
Many people purchase their property through a Family Trust as there are many tax benefits in a family trust structure, but it pays to know of hidden costs. Our client was not advised by his conveyancer about the tax implication of purchasing his home through a Family Trust. So the family home was purchased as an investment property through the family trust, which brings us to his urgent phone call.
We go above and beyond
Using a satellite internet connection, Ivan, our property lawyer, had one day to assist our client before he had to pay $10K in land tax. So placing the cruise ship family fun on hold, Ivan set to work on getting our client’s documents in order and property restructured, saving the client $10K that year and all subsequent years.
A property conveyancing lawyer differs from a conveyancer as they have a broader knowledge of the law and can advise clients beyond purchasing a property. It may be cost-effective to hire a conveyancer instead of a property lawyer. However, you can have peace of mind to receive thorough and sound advice.
We are happy to note that our client has enjoyed subsequent Christmas seasons instead of worrying about his property structure.