Ownership of a property can be transferred from a sole name to be held jointly with a partner without paying stamp duty if you meet certain requirements. To ensure that you meet all of the requirements before attempting the transfer, advice from a properly qualified practitioner should be obtained. Below is some further information on what to expect with this process.
Stamp duty exemptions in NSW when transferring to a partner or spouse
You may be able to add your spouse to your title without incurring stamp duty, however, there are some important considerations before you proceed further with adding your partner to the title: -
- stamp duty exemptions;
- transfer of ownership to either joint tenants or tenants in common; and
- the implications of any mortgage on the property.
A stamp duty exemption applies/ no stamp duty is payable, for the transfer of a property between couples who are married or in a de-facto relationship as long as the following conditions are also applied:
- The property that’s being transferred is the family home at the time of the transfer (i.e. it is the couple's principal place of residence);
- The property is used only for residential purposes; and
- The property will be held in equal shares by the couple following the transfer (see below for the options with respect to this).
The exemption also applies to vacant land where there is a home being built and will become the principal place of residence of the couple will be.
While the definition of 'de-facto' is flexible in other areas of law, for this stamp duty exemption to apply, the couple must have lived together for a minimum of 2 years before the transfer.
If the property is used for mixed purposes, for example, the property is a family home but part of the home is used for commercial purposes that you claim a tax deduction for, then you may receive a stamp duty concession (instead of an exemption).
This would mean that the stamp duty is exempt for the part of the property that is used for residential purposes, but full stamp duty is payable for the part of the property that is used for non-residential purposes
The definition of ‘spouse’ includes:
- Having a valid and subsisting marriage;
- Having a valid and subsisting civil partnership; or
- Are living in a subsisting de factor relationship and have lived together as a de facto couple for at least two years.
Transferring property that has a mortgage
For the transfer to be registered with NSW Land Registry Services, the Certificate of Title will be acquired. If you have a mortgage on the title, then the bank/mortgagee would need to consent to the proposed transfer, and produce the Certificate of Title for registration.
If a mortgage was obtained by one of the partners when they originally acquired the property in their sole name, then it is likely that they were also the sole mortgagor. The bank/mortgagee would require that your spouse who is coming onto the title is also subject to the mortgage (added as a borrower to the loan). Each bank/mortgagee has a different process with respect to this, and you should speak to your broker or contact at the bank regarding their requirements.
As your bank/mortgagee may impose several requirements, it can be preferable to arrange for this transfer to a partner either:
- at the time of a re-finance with the same or a different mortgagee; or
- following a discharge of mortgage (paying off your loan).
Otherwise, if after discussing the mortgagee's requirements with your broker or banker and it is not overly onerous on you or your partner, then you may wish to simply proceed with the transfer. There is often a production fee payable to the bank/mortgagee before they will produce the Certificate of Title for registration of your transfer. Something that your broker/ banker will also be able to tell you.
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Ezystep Conveyancing would be happy to assist with all your property title questions and concerns. We are still a fixed fee when it comes to providing this service to you, so request a quote or give us a call today to see how we can help you.