Tax Tip 202: Stamp Duty Exemptions for fixing Mistakes

Sometimes mistakes happen when registering property ownership. Ownership may be registered in the wrong percentages for joint owners for example. There are exemptions available to fix mistakes such as these without the need to pay duty a second time.


One example seen recently was where the client had their ownership of a new property registered as tenants in common 50/50 with their spouse. They didn’t realise this mistake until refinancing many years later and having a solicitor look over their situation. Evidence was produced that they requested the ownership be 99/1% but their original conveyancer disregarded or missed this when preparing the transfer and as a result the ownership ended up as tenants in common in equal shares.


This was rectified under section 65(14) of the Duties Act NSW without the need to pay additional stamp duty and the ownership ended up with the originally intended 99/1% split as tenants in common. Similar provisions exist in other states as well.


Normally changing from 50/50 to 99/1 would have resulted in duty being charged a second time on 49% of the property value.

 

Ahhh "the accountants exemption"....I have seen several cases of accountants assisting clients with property transfers off-market only to later learn that the transfer (ie trust declaration) is dutiable. Then they realise the mistake and repeat the transfer back to be whacked with double duty.

OSR NSW wont apply s65-14 to such cases

A good reminder that all such actions are legal advice and legal services

 

DUTIES ACT 1997 - SECT 65 Exemptions from duty