Stamp Duty Exemptions in Property Settlements After Divorce or Separation

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Stamp duty is the fee that is charged to the purchaser of property. The cost of the duty is determined based upon the sale price of the property being transferred. Therefore, the more valuable the property, the more the buyer owes to the government in transfer duty.

However, when property is being transferred and/or sold as the result of a divorce or dissolution of a de-facto relationship, it is possible to avoid making a payment of Stamp Duty.  It is also possible to avoid Stamp Duty when the property is being put into a trust for the welfare of the couple’s children, or being outright transferred to their children. 

To take advantage of the Stamp Duty exemption you must meet one of the following obligations;

  1. The transfer of property must be completed via the Court. Meaning that the transfer must occur as a result of a Court Order obtained via the Family Law Act, or;
  2. The transfer must be memorialized in a formal and binding financial agreement made in accordance with the Family Law Act.

If you do not meet either of these obligations, you and your spouse/partner will not be exempt from paying transfer taxes. If you meet one of these two requirements, you still must complete the process of applying for your exemption.

When attempting to exact your Stamp Duty exemption, it is imperative that all of the following steps are taken. As such, once you decide to embark upon securing a transfer exemption, it is highly recommended you engage the services of a solicitor who is experienced and knowledgeable in this legal transaction. If you miss a step, or complete one improperly, it could result in the denial of your application or slow down the process of receiving your approval and exemption status.

You must complete all of the following;

  • Provide a copy of your Court Order or you binding financial agreement which clearly states that the property is being transferred to a spouse, partner, child or trustee for the children of the relationship as a result of the dissolution of the relationship
  • Complete the land transfer form, which can be viewed and downloaded from the Land and Property website
  • Complete the application for exemption and/or refund due to dissolution of marriage or partnership
  • Complete the purchaser declaration form which will require you to declare that you were a married/de-facto couple and that the property is being transferred due to the break down/dissolution of the relationship/marriage. This form will also require you to provide detailed information about the property/transfer persons/liabilities and the overall nature of the transfer of the property. This form must be returned to the Revenue NSW. Keep in mind that the Revenue NSW can request supplemental proof and/or documentation at any time for the purpose of verification of the information you provide. 
  • Take all of the information and forms from the preceding four steps and send it to the Revenue NSW. Before sending the documents be sure to make copies for your personal records. You might also want to send the envelope/package with some form of return verification of receipt. 
  • Finally, if your application is approved you will receive notice from Revenue NSW that your Stamp Duty requirements have been waived.  

While it is true that there are many important moving parts to a smooth and successful dissolution of a marriage or partnership, these steps to exonerate yourselves from paying Stamp Duty taxes should also be considered crucial for the financial health and welfare of your family moving forward. Therefore, if you are in the process of separating, permanently, from your spouse or partner, it is wise to take the time to review your options with a solicitor. 

If you find yourself in need of assistance with this or any other legal issue, please contact the law offices of Owen Hodge Lawyers. At Owen Hodge, we are always happy to assist clients in understanding the full ramifications of any and all of your legal needs. Please feel free to call us at your earliest convenience to schedule a consultation at 1800 770 780.


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