Transfer duty is payable on property transactions in NSW. It is administered by Revenue NSW.
Transfer duty is payable when you buy:
- Investment property
- Vacant land or farming property
- Commercial or industrial property; or
- A business, including land
This is relevant in a family law property settlement, when one party seeks to retain the family home, investment property or family business.
Transfer duty is payable in these circumstances as the party retaining the property or business is buying the other party’s share.
For example, a Husband and Wife separate on a final basis. They reach agreement that the Husband will retain the jointly owned family home and the Wife will be paid an agreed sum. The Husband will be liable to pay Transfer duty to Revenue NSW as he is buying the Wife’s share in the family home.
Section 68 of the Duties Act 1987 (NSW) allows for there to be an exemption from any Transfer duty payable if the property is transferred or sold to:
- Either party to the marriage or de facto relationship
- A child to the marriage or de facto relationship
- A Trustee of a child to the marriage or de facto relationship
This exemption is available whether you have separated from a marriage or a de facto relationship.
You will need to satisfy Revenue NSW that the transfer or sale is as a result of the separation of a marriage or de facto relationship. The common ways of fulfilling this requirement are:
- Consent Orders made at the Family Court
- Financial Agreement pursuant with the Family Law Act 1975
In the usual circumstances the cost of the preparation of these documents will be less than the Transfer duty that would be payable.
Written by Steven Ng