KEY TAKE OUTS:
- There has been a Stamp Duty Exemption change in NSW
- This impacts the way that stamp duty is applied in a property transfer between seperating spouses or defacto partnerships
- Consent orders are still highly recommended to save you significant time, stress and money in the long run
When it comes to property transfers between separating spouses or de facto partners, one of the most significant financial considerations is stamp duty. For many years, the only clear way to obtain a stamp duty exemption in New South Wales was to have a property transfer formalised by family law consent orders sealed by the Family Court.
However, recent legislative changes have shifted the landscape. While this might seem like a simplification, it also brings a layer of uncertainty that separating parties should be aware of.
What Has Changed?
Traditionally, in order to be eligible for a stamp duty exemption on a property transfer following a relationship breakdown, parties were required to obtain sealed consent orders under the Family Law Act 1975 or a binding financial agreement that complied with strict formal requirements.
However, Revenue NSW has now updated its position and no longer requires sealed consent orders to grant a stamp duty exemption. Under the new policy, a written agreement between the parties may be sufficient, provided it clearly outlines the terms of the property settlement and meets certain criteria.
This legislative change is intended to reduce the burden on separating couples and streamline the process of dividing property. It acknowledges that not all parties choose to formalise their settlement through the courts and allows for more flexibility in resolving property matters privately.
So, Are Consent Orders Still Necessary?
In short: yes, they are still highly recommended.
While Revenue NSW may now accept a written agreement for the purposes of stamp duty exemption, there is no absolute guarantee that your agreement will be accepted, especially if it’s not drafted carefully or doesn’t clearly align with the requirements set out under the Duties Act 1997 (NSW).
Without a sealed consent order, you run the risk that Revenue NSW may deny the stamp duty exemption, leaving one party responsible for a potentially significant tax liability.
Why We Recommend Consent Orders
- Certainty of Exemption: Consent orders are the clearest and most reliable way to satisfy Revenue NSW that the transfer arises from a family law property settlement, ensuring you receive the stamp duty exemption.
- Legal Enforceability: A court-sealed consent order is legally binding and enforceable, offering greater protection in the event of future disputes.
- Comprehensive Documentation: Consent orders clearly document the agreement between the parties, which can assist in avoiding misunderstandings or potential legal complications down the track.
- Court Oversight: The Family Court reviews the proposed orders to ensure they are just and equitable, adding an extra layer of security and fairness to the arrangement.
Coutts can help!
While the recent changes offer more flexibility for separating couples, they also introduce some uncertainty. The safest and most prudent course of action remains to formalise any property settlement through consent orders filed with the Family Court.
If you’re navigating a separation and considering how to structure a property transfer, we recommend obtaining legal advice tailored to your situation. The team from Coutts can help, not only in settling your property through our Conveyancing team, but also in providing advice from our team of specialist Family Lawyers who can assist you in providing support and advice on your seperation or divorce. Proper guidance now can save you significant time, stress, and money in the long run.
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 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.
