Converting Silver into Real Estate....

G

GenYTrader

Member
Since originally getting into Silver after reading Mike Maloney's Guild to investing in Gold & Silver. One of the things I have always wanted to do with my silver when the time comes is to convert my Silver holding into Real Estate.


Now that time has passed (and silver holdings increased) I am now thinking about the logistics of doing such a transaction.

Does anyone know or have a plan to do this efficiently in Australia?


Comments appreciated. Thanks guys
 
My first thought here is that you will have trouble if you try and pay at settlement with $150,000?? of physical silver.

I think it will be called a 'cash transaction', and you may get the guvmint asking where the silver came from, how much you paid for it, and where you got the money.


OC
 
I've no idea if anyone has traded silver for real estate directly here, without the assistance of a fiat conversion and its respective hit...

I have, however, heard members talking about translating their gold holdings for real estate. I've been tempted to do that back in the UK now prices are appearing to bottom out, but I'll probably hold my gold for now, while the bull still appears to be charging :)

I'd be intrigued if some members have traded for RE though, gonna keep an eye on this thread.

Great question GenY :D
 
Deals such as those called "pepper corn" deals used to be popular. You could selll or lease property or chattels for "valuable consideration" (something that is still the backbone of contract law).

The idea was you would pass title to someone else for, say 50 bushels of wheat and 2 firkins of rum. Or pass title for one peppercorn. Or for one dollar, with rights of access for a lifetime.

You can still do it - but it depends on both parties. You don't have to do settlement using agents. If neither owe any money or are entering a mortagage, then title can pass for a peppercorn or 10 kg silver!
 
Great question GenYT , something I have been thinking for a while as well.
 
the last time this was asked the best response i saw was "it's going to make for one interesting court case"
 
Im not sure there would be too many problems with doing the deal it would be in the fineprint.

As far as i know you can sell a house for any amount . It would be the tax implications involved for the stamp duty etc trying to come up with a figure to satisfy the ato that you werent pulling a swifty avoiding the duty. Im not sure if they specify market value or stated value on the duty. I think thats where the problem would lie.

If the value of silver you swapped was fair market value it would be a simple transaction with your conveyancer or solicitor.The only problem i can see is if you cannot prove you bought your silver with a taxable income & that would only be a problem if you were audited.otherwise it would just fade into the thousands of sales conducted each week.

If i was back in oz i would ring my conveyancer to give you the specifics but im pretty sure there wouldnt be a problem
 
Thanks for all the replies guys.....I were wondering what would happen in the case of the property having a mortgage registered against it.

Interesting concept....
 
SilverPhoenix said:
Deals such as those called "pepper corn" deals used to be popular. You could selll or lease property or chattels for "valuable consideration" (something that is still the backbone of contract law).

The idea was you would pass title to someone else for, say 50 bushels of wheat and 2 firkins of rum. Or pass title for one peppercorn. Or for one dollar, with rights of access for a lifetime.

You can still do it - but it depends on both parties. You don't have to do settlement using agents. If neither owe any money or are entering a mortagage, then title can pass for a peppercorn or 10 kg silver!
Click to expand...

The Government does it, so can you.

In a recent proceedes-of-crime law-case in W.A. a pair of elderly parents had their family home confiscated by the state. Their son had stashed a big cashe' of drugs under the house (for personal use) and routinely returned to draw on his reserves. When the son was eventually caught, the parents (although completely ignorant of what their son had been doing) were also charged (don't get me started) and had the family home, which the father had built by hand 40 years earlier, confiscated by the state.

As a show of compassion, the house was rented back to the parents at a 'peppercorn' for as long as they wish to occupy.

EDIT; Spelling corrected..see below ;)
 
Clawhammer said:
SilverPhoenix said:
Deals such as those called "pepper corn" deals used to be popular. You could selll or lease property or chattels for "valuable consideration" (something that is still the backbone of contract law).

The idea was you would pass title to someone else for, say 50 bushels of wheat and 2 firkins of rum. Or pass title for one peppercorn. Or for one dollar, with rights of access for a lifetime.

You can still do it - but it depends on both parties. You don't have to do settlement using agents. If neither owe any money or are entering a mortagage, then title can pass for a peppercorn or 10 kg silver!
Click to expand...

The Government does it, so can you.

In a recent proceedes-of-crime law-case in W.A. a pair of elderly parents had their family home confiscated by the state. Their son had stashed a big cashe' of drugs under the house (for personal use) and routinely returned to draw on his reserves. When the son was eventually caught, the parents (although completely ignorant of what their son had been doing) were also charged (don't get me started) and had the family home, which the father had built by hand 40 years earlier, confiscated by the state.

As a show of compassion, the hose was rented back to the parents at a 'peppercorn' for as long as they wish to occupy.
Click to expand...

All they got rented back to them was a hose?

That sucks bro.
 
Old Codger said:
My first thought here is that you will have trouble if you try and pay at settlement with $150,000?? of physical silver.

I think it will be called a 'cash transaction', and you may get the guvmint asking where the silver came from, how much you paid for it, and where you got the money.


OC
Click to expand...

Whether the seller will settle for x ounces of silver should be up to the seller, since its his property - not the government's .... despite the impression the ATO gives to the contrary.
Government should get the f... out of the business of brokering RE - its got sweet buggerall to do with them!
 
SilverPhoenix said:
Deals such as those called "pepper corn" deals used to be popular. You could selll or lease property or chattels for "valuable consideration" (something that is still the backbone of contract law).

The idea was you would pass title to someone else for, say 50 bushels of wheat and 2 firkins of rum. Or pass title for one peppercorn. Or for one dollar, with rights of access for a lifetime.

You can still do it - but it depends on both parties. You don't have to do settlement using agents. If neither owe any money or are entering a mortagage, then title can pass for a peppercorn or 10 kg silver!
Click to expand...

Are you saying the state government would pass the title on without stealing so-called stamp duty?
Are you sure about his? Any links perhaps?

I still cant believe the thieving government would allow this...
 
Clawhammer said:
SilverPhoenix said:
Deals such as those called "pepper corn" deals used to be popular. You could selll or lease property or chattels for "valuable consideration" (something that is still the backbone of contract law).

The idea was you would pass title to someone else for, say 50 bushels of wheat and 2 firkins of rum. Or pass title for one peppercorn. Or for one dollar, with rights of access for a lifetime.

You can still do it - but it depends on both parties. You don't have to do settlement using agents. If neither owe any money or are entering a mortagage, then title can pass for a peppercorn or 10 kg silver!
Click to expand...

The Government does it, so can you.

In a recent proceedes-of-crime law-case in W.A. a pair of elderly parents had their family home confiscated by the state. Their son had stashed a big cashe' of drugs under the house (for personal use) and routinely returned to draw on his reserves. When the son was eventually caught, the parents (although completely ignorant of what their son had been doing) were also charged (don't get me started) and had the family home, which the father had built by hand 40 years earlier, confiscated by the state.

As a show of compassion, the house was rented back to the parents at a 'peppercorn' for as long as they wish to occupy.

EDIT; Spelling corrected..see below ;)
Click to expand...

This is exactly the reason Australia needs a Bill of Rights ... to protect citizens from the state!
 
"This is exactly the reason Australia needs a Bill of Rights ... to protect citizens from the state!"


Which is why the State will not allow you to have a Bill of Rights.


OC
 
How about using government issued bullion. Surely if the buyer offers 500oz of silver that might be tricky. But if the buyer was to offer $500 to be paid in $1/1oz perth mint coins that would be a legal transaction?

If they want stamp duty that can have their % cut of the $500. of course the guvment will be happy with paper money
 
2 Separate issues here as I see it:

1. Stamp Duty on the sale.

Stamp Duty here in Qld (so it may be slightly different in other states/territories although I doubt it) is payable on every transaction (ie sale/purchase). Duty is calculated on the greater of the consideration (price paid) or the value of the property. If the property is sold intra-family and for certain other transactions, an independent valuation must be obtained to determine that value. So if a house is sold for $500K and worth $490K duty is paid on $500K. Conversely if a property valued (by an independent registered valuer if necessary) at say $500,000 is sold for $1,000 duty is payable on the $500,000

2. Consideration

Consideration is what is paid for the property. This is by law (at least here in Qld) required to be cash or bank cheque in the absence of any agreement to the contrary. This means that should both parties agree, the buyer could pay the seller the agreed price in whatever form they agree. I've seen land sold for cars, boats, opals, gold and mixtures of these types of things. As long as both parties agree how much is being paid (whether in fiat value or in weight or some other clearly definable and measurable way) it's all good. Has nothing at all to do with the government (other than re stamp duty as above).

[h]Disclaimer[/h]
I am not a lawyer, nor a financial advisor. I believe the above info to be the position (and certainly was when I was in the RE development game some years ago), but, as always Do Your Own Due Diligence.
 
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