Stamp Duty for Spouses
The transfer of property between spouses is a transaction that takes place routinely. Whether it is to achieve taxation benefits or to put in place effective estate planning, it is important to consider the possible stamp duty implications of such a transfer before proceeding.
Previously, any transfer between spouses was exempt from stamp duty. However, this changed in 2017. The exemption on stamp duty is now limited.
Any transfers which take place between spouses after 1 July 2017 will attract stamp duty unless one of the following applies:-
Principal Place of Residence
The transfer of a property between spouses will still be exempt from stamp duty if the property being transferred as a gift and is their principal place of residence. This means that either spouse will need to have lived at the property for a continuous period of 12 months following the transfer. The 12 month residence requirement can commence at any time within the first 12 months from the date of the transfer.
Any other property that is owned by the spouses, including rental properties or commercial properties, will be liable to pay full stamp duty calculated on the market value of the property.
Similarly, if consideration is paid for the transfer of the principal place of residence, stamp duty will be payable on the market value of the property.
Breakdown of relationship
Upon the breakdown of a relationship, the transfer of property between the former spouses to sever their financial relationship will not attract any stamp duty.
This will include the transfer of any property owned by the parties which is transferred into either name.
This exemption can be claimed without the need for a Court Order in relation to a family law property settlement.
If you have been through a family law settlement following the breakdown of a relationship which mandates that property be transferred to each other, stamp duty will not be payable.
Who will a ‘spouse’ include?
The above exemptions will include spouses and domestic partners. This will mean parties who are married by law as well as parties who are in a de facto relationship, irrespective of gender.
There are many reasons why you may need to transfer property between spouses. It is best to have all relevant information before making the decision to transfer property and our office can assist you in this regard.