Stamp duty and property transfer between spouses and domestic partners

The transfer of property is very common between spouses and domestic partners. The stamp duty implications in such circumstances have been a point of concern for many of our clients. The purpose of this update is to provide a summary in relation to stamp duty implications in such context.

Section 43 of the Duties Act 2000 (Vic) (Act) provides a stamp duty exemption for transfers of property between spouses and domestic partners but only in relation to residential property and subject to the requirement that at least one person in the relationship lives in the property as their principle place of residence (PPR) for a continuous period of at least 12 months commencing within the 12 months period immediately after the transfer. This means that the transfer of non-residential or investment property between spouses and domestic partners will not be duty - exempt.

This does not impact on Section 44 of the Act, where it specifies that the duty exemption will continue to apply for property transfers due to breakdown of a marriage or a domestic relationship, irrespective of the property type.  

It is important to note that the below key conditions need to be satisfied for the duty exemption to apply in the case of property transfer between spouses and domestic partners:

1.       the persons are spouses or domestic partners of each other;

2.       there is no consideration for the transfer;

3.       the property is residential property; and

4.       no third person outside of the relationship is entitled to take an interest of the property.

Stamp duty is still applicable if the transfer is between parents and children or between siblings.

Should you have any questions in relation to property transfer between family members and its stamp duty implications, please feel free to get in touch with us.