Transfer Property Without Paying Stamp Duty

You’re putting your partner’s name on the title. Or the house is moving across to you after a separation, or after a parent has died. Then someone mentions stamp duty, and on a Sydney property that’s a five-figure number you hadn’t budgeted for.

The short answer is yes, you can transfer property without paying stamp duty, but only in specific situations. In New South Wales the two big ones are a transfer of the family home between married or de facto partners, and a transfer made after a relationship break-up under a court order or a binding financial agreement. Property passing from a deceased estate to a beneficiary is charged a nominal amount instead of full duty.

Everything else is assessed the normal way. Here’s who qualifies, what the rules actually require, and how you claim an exemption.

What stamp duty is, and when you pay it

Stamp duty, or transfer duty as Revenue NSW calls it, is a state tax on the transfer of property. It’s worked out on the dutiable value of what’s being transferred, which is the market value or the price paid, whichever is higher.

That last part is the bit people trip over. Duty follows the value of the property, not the money that changes hands.

Rates run on a sliding scale and are adjusted each year with the Consumer Price Index. Under the current NSW rate table, a dutiable value between $387,001 and $1,290,000 is charged at $11,602 plus $4.50 for every $100 above $387,000.

If you’re buying your first home rather than moving one between people you know, that’s a different pathway with its own rule. The First Home Buyers Assistance Scheme carries a full exemption or a concessional rate within set value thresholds, set out by Revenue NSW. The rest of this page is about transfers between partners, family members and estates.

Gifting a property does not remove the duty

Sell the house to your brother for a dollar and Revenue NSW still assesses duty on what the house is worth. Gift it outright, with no money at all, and duty is still payable on the market value.

This is where a lot of people get caught out. They hear that duty is charged on the purchase price, so they write a small number on the contract and expect a small bill. Duty is charged on market value, so a low price achieves nothing.

What removes the duty is an exemption, not a discount on paper. The full list of NSW exemptions and concessions sits with Revenue NSW.

Transferring the family home to a spouse or de facto partner

In NSW, no duty is charged when you transfer an interest in the family home to your husband, wife or de facto partner, provided the transfer meets each of these conditions:

• The property is a residential dwelling used as your principal place of residence, or vacant land you intend to build your home on.
• After the transfer, the two of you own equal shares, either as joint tenants or as tenants in common in equal shares.
• The property is used solely for residential purposes. Use part of it for business or commercial purposes and the full exemption isn’t available, though a partial concession may be.
• If you’re not married, you have lived together in a de facto relationship for at least two continuous years before the transfer.

That two-year requirement is strict. Twenty-three months together and the exemption isn’t available, no matter how settled the relationship feels.

The exemption sits in section 104B of the Duties Act 1997 (NSW), with a partial concession in section 104C. Conditions and the application steps are set out by Revenue NSW.

Transfers after a separation or divorce

When a relationship ends and property has to move between you, NSW doesn’t charge duty on the transfer, as long as it’s done properly.

Here’s the catch. The exemption attaches to the formal settlement, not to the separation itself. Revenue NSW wants evidence of the break-up, such as a separation certificate, divorce certificate or statutory declaration, and evidence of the property settlement. That settlement evidence is one of the following:

• Orders made by the Federal Circuit and Family Court of Australia.
• A binding financial agreement under the Family Law Act 1975.
• An agreement made to divide property because of the separation.
• For a domestic relationship, a termination agreement under section 44 of the Property (Relationships) Act 1984 (NSW).

A verbal understanding with nothing recorded gives you none of that. Court orders or a binding financial agreement are the safest route, because they satisfy the duty exemption and make the split enforceable at the same time. Our property settlement lawyers page walks through how each option works.

I see the same sequence often enough that I warn people about it before they ask. A couple separates, agrees between themselves that one of them keeps the house, and gets the transfer lodged straight away because it feels like the clean thing to do. Duty is assessed as if it were an ordinary transfer, and it gets paid. The orders or the financial agreement are done months later, once everything else has settled down. The exemption was available the whole time. It just wasn’t in place on the day the transfer went in.

One point worth knowing, because plenty of people assume the exemption only covers the two of you. In NSW the transfer can also go to a child of either party, or to a trustee for a child, excluding discretionary trusts, or a trustee in bankruptcy.

The break-up exemption sits in section 68 of the Duties Act 1997 (NSW). Property orders are made under section 79 of the Family Law Act for married couples and section 90SM for de facto couples. Revenue NSW sets out the evidence and lodgement requirements on its marriage or relationship break-ups page.

Deceased estates and inherited property

Property that passes to a beneficiary of a deceased estate isn’t charged full duty on market value. In NSW the transfer attracts concessional duty of $100, provided it’s made under and in conformity with the will, the rules of intestacy, or a court order where the will was contested.

“In conformity” is taken literally. The property has to pass exactly as the will provides. If the beneficiaries agree between themselves to swap or reshuffle what each of them receives, through a deed of family arrangement or similar, the transfer is no longer in conformity with the will and standard duty applies to anything received beyond the original entitlement.

So the paperwork matters more than the intention. If you’re administering an estate and the beneficiaries want to vary who gets what, talk to your wills and estates lawyers before anything is signed, because the duty consequence lands on the beneficiaries.

The concession sits in section 63 of the Duties Act 1997 (NSW). See the Revenue NSW deceased estate page.

Related-party transfers and the market-value rule

The Duties Act 1997 (NSW) uses the term “related persons” rather than “related party”, and it generally covers spouses and de facto partners, parents and children, brothers and sisters, a private company and the people who control it, and a trustee and a beneficiary of the same trust.

Transfers between related persons get looked at closely for one reason. When the buyer and the seller know each other, the price on the contract isn’t necessarily what the property is worth, so duty is assessed on market value regardless of what the two of you agreed. Where no money changes hands, or only a nominal amount, Revenue NSW’s evidence of value guidelines call for a valuation by a suitably qualified person who has inspected the property, or evidence of a recent arm’s length sale. A brief market appraisal isn’t enough.

Which brings you back to the same point. A friendly price between family members doesn’t reduce the duty. An exemption does, and only if your transfer fits one.

Transfers between a trustee and a beneficiary

A terminology check first, because searching this topic will land you on American material. You’ll see revocable trusts, irrevocable trusts, grantors and spendthrift clauses. Those aren’t Australian concepts and they don’t describe your transfer. Here you have a settlor who establishes the trust, a trustee who holds the property, and beneficiaries. The common structures are discretionary trusts, often called family trusts, fixed and unit trusts, and testamentary trusts created by a will.

Who is the primary beneficiary of a trust?

The primary beneficiary is the person the trust deed puts at the centre of the beneficiary class, sometimes called the principal or default beneficiary. There’s no statutory definition of the term. The deed decides it. In a typical family trust the primary beneficiary is named in the schedule, and the general beneficiaries are then defined by their relationship to that person: a spouse, children, grandchildren, and often related companies and trusts.

Being named as the primary beneficiary doesn’t make you the owner of the trust property. In a discretionary trust the trustee still decides who receives income or capital and when, unless the deed says otherwise. Some deeds carry a default clause that directs income to the primary beneficiary where the trustee makes no distribution for the year. If you need to know where you actually stand, the answer is in the deed, not in a general rule.

Whether duty is payable when a trustee transfers property to a beneficiary, and how much, depends on the type of trust and the terms of the deed. There’s no single answer that covers every structure, and this isn’t a place to guess. Have the deed read before the transfer is prepared, not after it’s been lodged.

Stamp duty exemptions state by state

Duty is a state and territory tax, so the conditions change at the border. Here is how every jurisdiction handles the two transfers people ask about most.

Wherever the property sits, check the revenue office in that state before you sign, because the conditions and the evidence they want aren’t interchangeable.

How to claim the exemption

The exemption isn’t automatic. It’s claimed when the transfer is lodged, and it stands or falls on the documents you hand over.

1. Gather the evidence first. For a spouse transfer, proof of the relationship and that the home is your principal place of residence. For a break-up, evidence of the separation plus the court order or agreement. For an estate, the grant of probate and the will.
2. Have your solicitor or conveyancer lodge the application. In NSW the exemption and concession applications are handled by a legal representative as part of the transfer, so build it into the conveyancing rather than trying to sort it out afterwards.
3. Complete the paperwork properly. A break-up application needs the original executed transfer, the exemption application form, a purchaser or transferee declaration with proof of identity, evidence of the break-up, and evidence of the property settlement.
4. Already paid the duty? Ask for it back. You have up to five years after the initial assessment to apply for a refund.

That five-year window is what rescues the sequence I described earlier. If you settled informally, paid the duty, and only formalised the split later, the money may still be recoverable.

What the exemption is actually worth

Take a home in Sydney worth $1.2 million, held in one partner’s name, with a half share being transferred to the other.

Those figures come from the current NSW rate table and are an illustration, not a quote for your matter. Rates shift each year with CPI, and your dutiable value depends on the valuation. The point stands either way: qualifying for the exemption is worth more than any amount of haggling over the price on the contract.

What about capital gains tax and Centrelink?

Two things a duty exemption doesn’t do for you.

It doesn’t deal with capital gains tax. Duty is a state tax on the transfer; capital gains tax is a federal tax on the gain, and they’re assessed separately. If the property is anything other than your main residence, check the ATO position before you transfer.

It also doesn’t protect a pension. Giving away or transferring a home can affect how Services Australia assesses you for a payment, under the gifting rules. If you or a parent are on a pension, get that checked first.

Not sure which side of the line you are on?

Most of the expensive mistakes here are timing mistakes. The transfer gets signed, the duty gets assessed, and only then does someone ask whether an exemption was available.

If you’re transferring property to a partner, after a separation, or out of an estate, have someone look at it before it’s lodged. Book a free discovery call with me and my team on 1300 614 732 or send us a message, and speak to our property settlement lawyers about where you actually stand. No pressure, no obligation, just a clear answer on whether your transfer qualifies.