Do I need to pay stamp duty if I transfer a property to a family member? Ask Margaret

Hi Margaret,

Is stamp duty payable on a transfer of real estate from father to sibling or vice versa?

Please help. What would be the best way to do this transfer?

Regards,

Neville

Margaret's answer is on the next page. Please click below.

Hi Neville,

The answer to depends upon which state you live in.

For example, if you live in NSW and the property is located there, then the stamp duty which would apply will be the same amount that you would pay were you to buy the property.  This means that the property must be valued by a duly qualified person and then stamp duty is assessed on the basis of this valuation. 

You will also have the costs of a solicitor or conveyancer, who must still have the property conveyed to you and so will charge you for that in a similar way to how you would be charged if it were a purchase.

Where property is transferred between family members, it's theoretically possible to transfer property using a 'transfer' form and without going to the expense of having a full contract for sale prepared, with appropriate disclosure documents such as title searches and council zoning certificates. You may prefer to use the usual contract for sale however, as this will protect all parties to a greater degree.

In some states there may be an exemption for transfer between family members, although this usually applies only to spousal transfers.  Depending on the nature of the real estate some exemptions may apply - property used for primary production (family farm) may be exempt and other real estate might have some exemptions depending upon the circumstances around the transfer.

Also be aware that, depending upon the nature of the property for your father (for example if it was his investment property), there may be capital gains tax to be paid.

I find the offices of state revenue in each state are very helpful, so you should give them a call and discuss your personal circumstances.

Kind regards,

Margaret

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