The Client
An existing STAC Capital client with a known income profile and strong ongoing relationship with the business. The client identified a long-term development opportunity on Brisbane’s southside and sought to acquire three residential properties, under a single legal entity.
The Transaction
Detail | Particulars |
Properties | 3 residential dwellings |
Titles | Separate titles, separate vendors |
Borrowing Entity | Single legal entity |
Strategy | Long-term development play |
Location | Brisbane southside corridor |
The Challenges
1. Stamp Duty Aggregation
Despite the three properties settling separately, the Office of State Revenue assessed stamp duty on an aggregated basis – a common but often overlooked exposure in multi-title acquisitions. This created an unexpected funding shortfall of approximately $40,000 that required a solution mid-transaction.
2. Credit Policy – Development Site Treatment
The lender’s credit team initially sought to classify the properties as a vacant development site, which would have triggered a maximum LVR policy of 55% – materially below what the client required and what the deal warranted.
3. Valuation – Highest and Best Use
With three properties on separate titles being acquired as a combined holding, credit raised the question of “highest and best use,” which – if accepted – would have justified the harsher LVR policy applied to development land.
The STAC Solution
Jordan Webb’s strategy centred on a single critical point: the individual dwelling values, as assessed by independent valuation, were each sufficient to support the combined purchase price on a standalone basis.
This meant no “site premium” existed – the properties hadn’t been valued as an assembled development site attracting a premium over their individual values. Without a site premium, there was no basis to apply development-site credit policy.
The argument was accepted by credit, and the deal was approved as originally submitted.
To manage the LVR sensitivity acknowledged through the process, a 12-month interest-only structure was negotiated, providing a planned re-assessment window once the client’s position consolidates.
The Outcome
Metric | Result |
LVR Achieved | ~70% |
Loan Structure | 12-month interest-only |
Pricing | BBSY + 1.80% margin + 0.20% facility fee |
Facility | Fully drawn at settlement |
Approval | As submitted |
Key Takeaways for Borrowers
- Stamp duty aggregation in Queensland can catch you off guard in multi-title acquisitions. Where separate properties are purchased by the same entity, even under separate contracts and settlements, the Office of State Revenue may assess duty on an aggregated basis. Always model aggregated duty exposure – not per-property duty — before finalising your funding structure.
- Development intent can reduce your available LVR unless challenged. If your properties are income-producing dwellings, independent individual valuations are critical to countering a lender’s attempt to apply development-site policy.
- Relationship and income profile matter at credit. An existing client with a known track record provides a lender with context that a new borrower simply cannot offer. This contributed to the flexibility achieved in the final credit outcome.
- Interest-only as a strategic tool. Rather than forcing a lower LVR or a different structure, a 12-month IO period with a planned re-assessment gave the lender comfort and the client the breathing room they needed.
