Transferring Property Following the Breakdown of a Relationship
Are you married or in a de facto relationship that has broken down resulting in the need to transfer real estate from one party to another?
Unfortunately marriages and de facto relationships break down all the time. If following such a relationship breakdown a house that is jointly owned needs to be transferred from one party to another as a result of a property settlement, it is important that you have proper legal advice. Under Section 68 of the Duties Act 1997, a property transfer is exempt from stamp duty if the transfer is the result of the breakup of a marriage, de facto relationship or domestic relationship.
There are important technical requirements that need to be complied with to make sure there is no stamp duty on the transaction, which will save you thousands of dollars:
- If you are married you must have a Financial Agreement in place under the Family Law Act 1975 or some other form of written agreement evidencing the fact that the breakdown of your marriage is irretrievable and you have decided to split the matrimonial assets;
- If you are in a de facto relationship you must have a Financial Agreement in place under the Family Law Act 1975 or Court Orders such as Consent Orders. Only a family lawyer can prepare these for you;
- If you are in a domestic relationship you must have Court Orders in place dividing the assets of each party or a Termination Agreement in accordance with the Property (Relationships) Act 1984.
Similar rules apply in the context of transfers of property between married and de facto couples whereby you can obtain a stamp duty exemption if as a result of the transfer the property will be held by the couple as joint tenants or tenants in common and equal shares.
The most common context where this arises is where one party to the relationship already owns real estate before the relationship commences and later wishes to transfer share of the property to their partner.
If you need family law advice or property law advice, contact one of our lawyers today on (02) 4704 9991.