When you transfer property between you and your ex as part of a property division, you may not turn your mind to the issue of whether stamp duty might apply to certain transactions. Stamp duty is the tax paid to the State Government upon the transfer of property, usually by the purchaser.
Stamp duty is payable on all transfers of land in Victoria, however full exemptions are available for transfers between spouses or domestic partners in existing relationships as well as where there has been a breakdown of the relationship.
Existing relationships
For spouses or domestic partners who are currently in a relationship, stamp duty exemptions are available for transfers of residential property between natural persons to the relationship, where:
- at least one person in the relationship will live in the property for a continuous period of at least 12 months; and
- the transfer does not involve a monetary transaction.
Note that obtaining a mortgage or refinancing at or before the time of the transfer is not considered to be a monetary transaction for the purposes of this exemption.
Former relationships
For transfers arising out of a breakdown of marriage or domestic relationship, stamp duty exemptions are available for transfers of any property between parties to the former relationship where the reason for the transfer is solely due to the breakdown of the relationship. It is important to clearly record the transfer in a document such as a Consent Order or a Financial Agreement to ensure that the exemption is available.
This exemption may also be available where the parties to the transfer include companies, trusts and/or dependent children, however these transactions require complex assessment by the State Revenue Office. The State Revenue Office may take a strict approach here, and making sure that your transaction is not subject to stamp duty is important. For example, if you are transferred between two family trusts, careful consider of the situation needs to be made.
Further details on these exemptions are available on the State Revenue Office website here: https://www.sro.vic.gov.au/land-transfer-duty
If you or anyone you know may benefit from this exemption or require assistance with transferring property or dealing with assets in a relationship, please contact our experienced Property or Family Law team on (03) 9614 7111.