A question that often arises when transferring property is whether the party who is to retain the home or investment properties has to pay Stamp Duty.
For example, Dave has recently separated from Ella and they have 2 properties that are held in joint names. The agreement reached between Dave and Ella is that Dave is to pay Ella the sum of $300,000 and Ella will transfer her interest in both properties to Dave. However, Dave is worried about whether he will have to pain Stamp Duty on one or both of the properties.
Pursuant to 71CA of the Stamp Duties Act 1923, properties that are dealt with by order of the Court or by a Family Law Agreement such as Consent Orders or a Binding Financial Agreement are exempt from Stamp Duty.
How does this work? Dave instructs a solicitor to draft an Application for Consent Orders and Minute of Orders (collectively referred to as “consent order documents”). Dave and Ella both sign these documents and they are filed in Court. The Court takes about 4-6 weeks to process the proposed orders and assuming there are no issues, the Court will seal them and they will become Orders of the Court.
Dave needs help with the conveyancing aspect and engages a Registered Conveyancer to assist him with the transfer of Ella’s interest in the two properties to him. The Conveyancer attends at Revenue SA and has a sealed copy of the Orders assessed for Stamp Duty. Since the properties are exempt from Stamp Duty pursuant to the Stamp Duties Act, Revenue SA will assess the Stamp Duty payable as $0.00.
So, essentially Dave is receiving (or purchasing) Ella’s interest in both properties without having to pay stamp duty on the transfers.