KEY TAKE-OUTS:
- Tenants of Department of Housing, Community Tenancy Scheme and Aboriginal Housing may qualify for a full Stamp Duty exemption in NSW;
- A tenant can purchase with other family members who are not tenants and still receive exemption; and
- A tenant will be required to purchase at least 25% of property and use property as principal place of residence for at least 6 months within 12 months of purchase.
What is the exemption under Section 278 of the Duties Act 1997?
As most prospective purchasers are aware when purchasing a property in NSW a payment of Stamp Duty to NSW Revenue is always required unless you qualify for an exemption.
Most people are also aware there are Stamp Duty exemptions or concessions available for First Home Buyers, however in order to claim these, you must meet a certain list of criteria, such as your purchase price being within the thresholds of the scheme.
However, another Stamp Duty exemption is available that is not subject to thresholds, although it seems to be rarely spoken of.
A tenant or tenants of Department of Housing and Aboriginal Housing can receive a full Stamp Duty Exemption from NSW Revenue, regardless of the properties purchase price, in accordance with Section 278 of the Duties Act 1997 (“Exemption under 278”).
What are the eligibility requirements?
In order to claim this exemption, you are still required to meet the eligibility requirements, although these requirements are far less restrictive than the First Home Buyers eligibility criteria. In accordance with the Exemption under 278, to be eligible for this Stamp Duty exemption you must meet the below criteria.
- You must be an “Eligible Tenant”, a person is considered an Eligible Tenant if the person meets the below requirements:
- Is a tenant of the Department of Housing, or
- Is a tenant under the Community Tenancy Scheme administered within the Department of Family and Community Service, or
- Is a tenant of the Aboriginal Housing Office.
- The purchasers, or at least one of the purchasers or borrowers:
- Is, at the date of the transaction, an Eligible Tenant;
- Will be purchasing at least a 25% ownership share of the property; and
- Intends to occupy the land as the purchaser’s principal place of residence, for a continuous period of at least six (6) months, with that occupation period starting within twelve (12) months after the purchase is completed (“Residency Requirement”).
If an Eligible Tenant is purchasing less than 100% of the ownership of the property:
- The other purchaser(s) must be natural persons; and
- A member of the Eligible Tenant’s family (limited to the spouse or de-facto partner of the other; or the relationship is of parent and child, brothers, sisters, or brother and sister); or a person who is genuinely assisting the Eligible Tenant to acquire the land as their principal place of residence.
Please note the eligible tenant or the other purchaser, does not have to be a First Home Buyer in order to qualify for this exemption.
What happens if the eligible tenant fails to comply with the residency requirement?
If an Eligible Tenant fails to comply with the Residency Requirement, they must:
- Within fourteen (14) days after the expiration of the twelve (12) month period after the purchase has completed, provide written notice of the fact that they have failed to comply with the Residency Requirement; and
- Pay the stamp duty that would have been payable on the purchase if they had not been given the Exemption under 278.
It is important to note a person who fails to comply with the above is guilty of an offence.
How do you apply for this exemption?
Should you meet the requirements above, your conveyancer will have you complete the NSW Revenue Exemption from Duty Form ODA022. You will also be required to provide a letter from the Department of Housing or the Aboriginal Housing Office verifying your tenancy, which is submitted along with the Exemption from Duty Form ODA022.
ABOUT CHRISTINE BASSETT:
Christine is a Licensed Conveyancer and Justice of the Peace at Coutts’ Narellan office. Since joining Coutts Lawyers & Conveyancers in 2013, Christine quickly immersed her interest in the property and has since completed studies of Conveyancing Law and Practice at Macquarie University; and is accredited with the Australian Institute of Conveyancers NSW.
For further information please don’t hesitate to contact:
Christine Bassett
Licensed Conveyancer & JP
info@couttslegal.com.au
1300 268 887
CONTACT COUTTS LAWYERS & CONVEYANCERS TODAY.
This blog is merely general and non-specific information on the subject matter and is not and should not be considered or relied on as legal advice. Coutts is not responsible for any cost, expense, loss, or liability whatsoever in relation to this blog, including all or any reliance on this blog or use or application of this blog by you.
