Buyers Wanting To Add Other Names To A Contract
We have on occasion seen clients who are unable to obtain finance for a property purchase on their own, who then want to add another party as a Buyer to the Contract so finance can be accepted.
This can be a problematic course of action as the Office of State Revenue can impose a double stamp duty assessment on the Contract as it is in fact a second transaction on the same property and if you as a Buyer don’t pay the stamp duty, the Office of State Revenue will look to the Seller for the outstanding amount.
In Queensland, Stamp Duty on a new home is upwards of $10,000 and for an investment property is even greater, so having to pay double this is an expensive alteration to your contract.
If financing is unattainable in the single name, then the finance clause cannot be satisfied, and therefore we would recommend that the contract be terminated under this clause.
After the original contract is terminated, a fresh contract can then be prepared including the two purchasing parties to approve finance, with the cooling-off period waived, containing the same terms and conditions as the original contract.