Toowoomba-based firm of solicitors

Email

info@keoghlawyers.com.au

Phone

(07) 4632 2411

Address

145 Russell Street, Toowoomba City, 4350

BRIEF ARTICLES

Are you paying unnecessary Transfer Duty ( Stamp Duty) in a matrimonial/ De Facto property settlement?

 

When a de facto or married couple make the decision to separate, generally a division of their property will follow. More often than not, real estate is involved. Sometimes the property will be sold and other times, one of the spouses will retain the property and have the other Spouse’s interest transferred to them.

 

In Queensland, to change real estate from joint names to one party’s sole name, a Transfer document is required to be lodged with the Department of Resources. A transfer from joint names to one name usually will require the payment of ‘Transfer Duty’, (formerly known as Stamp Duty), which is payable to the Office of State Revenue. The Transfer Duty can be many thousands of dollars depending on the market value of the property.

However, what many separating couples do not know is that they may be eligible for an exemption of Transfer Duty which means they should not pay any Transfer Duty in certain circumstances where there is a breakdown of a de facto relationship or marriage. The exemption is set out in both the Duties Act 2001 (Section 424) and the Family Law Act 1975 (Section 90L or Section 90WA). For the exemption to apply, strict criteria must be met, including: –

  1. The relationship must be permanently broken down;

  1. The property is to be transferred to one party of the relationship;

  1. The property transfer is in strict accordance with a Financial Agreement or Consent Orders under the

Family Law Act;

  1. The Financial Agreement or Consent Orders must:-

· predate the transaction (i.e. the transfer);

· provide clear direction as to whom the property is being transferred, with the parties names on the Orders matching the names on the Transfer document; and

· the property is to be correctly specified in the Financial Agreement or Consent Orders.

To ensure that you receive the Transfer Duty exemption (i.e. you pay no Transfer duty), a Financial Agreement or Consent Orders should be expertly drafted to satisfy the Transfer Duty Exemption.

By way of example, a jointly owned home with a value of $600,000, where one party to the relationship was transferring their half share to the other party as part of a property settlement, the Transfer Duty payable by the acquiring party would be $6,125 in the absence of a valid claim for exemption. Transfer Duty should be assessed at ‘Nil’ if the parties enter into a correctly drafted Financial Agreement or Consent Order, where the requirements are satisfied to obtain the exemption.

We invite you to contact our office to enquire whether you are at risk of paying unnecessary Transfer Duty with regards to any Family Law property settlement matters.

NOTE

This information is of general nature only and is not intended to be a substitute for legal advice specific to the particular circumstances of individual cases.