A Related Party Transfer (RPT) is the process of where a property is transferred between parties that are related.
The term ‘related parties’ means people who are related by blood, marriage, relatives, associated trusts and companies.
How does stamp duty work on a Related Party Transfer?
Stamp duty (now known as land transfer duty) is payable when you acquire an interest in a property.
Where the acquisition of interest is the result of an RPT, the treatment of stamp duty may vary. Some factors that could impact how stamp duty is calculated to include:
- Who are the parties to the transfer?
- What type of property is being transferred?
- Was there monetary consideration paid for the interest acquired?
Property transfers between spouses, de-facto partners, or domestic partners
Where there is no breakdown of a relationship, parties that are either spouse/de- facto partners/ domestic partners, stamp duty is exempted for a property transfer. This is provided:
- The parties are Australian Citizens and or permanent residents; and
- The property being transferred is the primary residence of the parties (i.e. principal place of residence); and
- The property was transferred for no monetary consideration (i.e. no exchange of monies for the transfer of an additional interest in the property)
In instances where there has been a breakdown in the relationship between either spouse/de- facto partners/ domestic partners, stamp duty may be exempted provided:
- It is satisfied that the relationship between the parties has irrevocably broken down (i.e., there is no possibility of the parties reconciling their relationship); and/or
- There are court orders/ financial agreements in place detailing the property division
Note there is no restriction on the type of property being transferred.
Property transfers between other related parties
Where there is a transfer of property between related parties who are not spouses, de-facto partners, or domestic partners, stamp duty is not exempted based on the parties being related.
That said, the party acquiring interest in the property may seek out other stamp duty concessions provided they met the eligibility requirements. For more information, see first home buyer duty exemption, concession or reduction, principal place of residence duty concession.
Contact W Legal Group!
Understanding the types of exemptions, concessions or reductions that may be available for your Related Party Transfer can be tricky. Speak with the W Legal Team today understand your stamp duty concession eligibility.
