Stamp Duty On Property Transfer During Divorce Or Separation

As one of the best family lawyers in Melbourne, Glezer Lanteri & Associates take into account ‘hidden’ costs associated with a property settlement in divorce, including stamp duty, tax etc.  One of the questions we are frequently asked is: With the changes in stamp duty, will I have to pay stamp duty on transfer of property during divorce and separation?

In Victoria, married and de facto couples have been able to transfer investment and commercial properties to each other without incurring Stamp Duty. This is about to change.

From 1 July 2017, couples will have stamp duty assessed on transfers of commercial and investment properties between them. The exemption for residential property will continue (so long as it has been continuously occupied as a principal place of residence in the 12 months prior to the transfer). The exemption will also continue with respect to transfers following a relationship breakdown, accordingly the changes will not impact separating couples.

Let us look at some examples. Matt and Jenny have been married for 5 years. Matt has 4 investment properties in his name and Jenny has none. Matt decides that he would like to transfer 2 of the investment properties to Jenny. If this were to happen after 1st July 2017, they would have to pay stamp duty on the transfer.

In another example, Mary and Joe are getting divorced. Mary has 4 investment properties and Joe has none. Under the settlement terms of the divorce, Mary has to transfer 2 properties to Joe. As they are getting divorced, they will not be liable for stamp duty on the transfer.

Yet another example, we have Kathy and Mavis in a same sex de facto relationship. Mavis has 2 investment properties in her name. Under the terms of the separation, it is agreed that Mavis will transfer one investment property to Kathy. As they are separating, they will not be liable for stamp duty on the transaction.

In another example we have Keith who owns a home and married to Sue a year ago, he decides he wants to make Sue a joint owner of the property. In other words they will both be on the deeds to the property. As they are in a relationship, and the property is their residence since they married, they will not have to pay stamp duty on the transfer.

Finally we have Ken and Barbara who are in a relationship for the last 10 years. Ken bought the property they live in when they got married and they have stayed in it ever since. As Ken’s health is failing, he decides to make Barbara a joint owner. As the property is their residence and they have lived in it for over 12 months, they will not have to pay stamp duty on the transfer.

Let us  assess your situation today. Call us on (03) 9658 7700 to discuss your individual circumstances with our  family lawyers.  Our lawyers are experienced in all facets of family law in Melbourne.