Western Australian stamp duty 101
When transferring property, stamp duty is or isn’t payable, depending on the transaction type and the family relationships of the people involved.
Conveyancing can be quite a complex area, so it’s important to keep up by checking the fact sheets at the Office of State Revenue (OSR) website.
This complexity also illustrates the benefits for people buying, selling and transferring property in using the professional services of a qualified settlement agent.
To be clear about when stamp duty is and isn’t payable, let’s look at the payment and exemption rules as they exist currently in Western Australia.
Most people are aware that eligible first home buyers pay no duty providing the sale price is under $500,000, but what about other types of transactions? What happens when ownership changes between family members even if no money changes hands?
In general, every change in ownership, with a handful of exceptions, and regardless of the consideration, will incur duty.
Not only do transfers to related parties incur duty they may also incur capital gains tax (CGT) if the property being transferred is an investment property, even if no consideration is paid.
This means that parents who add children to an existing title on the family home will incur duty.
The most common example of where stamp duty is not payable is with a family home and couples.
For example, a home may currently be owned in a husband’s name and he wishes to add his new wife as a joint tenant.
This ruling also applies to de facto couples, including same-sex couples. Stamp duty does not apply here.
If a property is owned by a family trust and it wishes to transfer the property to a beneficiary of the trust, providing certain requirements are met and all the OSR duty information requirements are satisfied, that may result in a nominal duty of just $20.
Some transfers between couples pursuant to Family Court Orders would also be exempt. The OSR fact sheet details this.
Transfers to remove persons from a title, e.g: where that person has died or as a result of a marital separation, do not necessarily incur additional duty.
If people are in the contract phase of buying property and they want to add or delete names on the title, providing the nominee is related to the original buyer this does not incur stamp duty. However, doing this after the property has settled will attract duty, so it’s important to get the timing right.
As you can see, there is almost no avoiding this payment, so it’s important to factor these costs into any property transactions you may be undertaking.
For more details go to: www.osr.wa.gov.au
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