Property transfers between married and de-facto couples occur regularly in NSW. Under section 104B of the Duties Act 1997 (NSW), these transfers qualify for an exemption of stamp duty provided it is the couple’s principal place of residence, and they enter onto the Title as joint tenants or tenants in common in equal shares. Transfers between a couple with a foreign transferee are eligible for the stamp duty exemption, but they are subject to an additional surcharge (surcharge purchaser duty).
Who is classified as a foreign person?
A person will generally be deemed foreign if they are not an Australian citizen or not ordinarily a permanent Australian resident. If a party is an Australian citizen, it is immaterial if they reside in Australia. If a person is a permanent resident, they must hold a permanent entry visa and have been in Australia for 200 or more days in the preceding 12-month period.
If a New Zealand citizen holds a subclass visa 444 and has lived in Australia for more than 200 days in the 12 months before the date of transfer, they will not be considered foreign for the purpose of the surcharge.
Surcharge purchaser duty
Surcharge purchaser duty is calculated at 8% of the value of the property that a foreign transferee receives. It applies to all acquisitions of NSW residential land by foreign individuals, corporations, and trusts. This means that if a foreign party were liable to pay stamp duty without an exemption, they would also need to pay the surcharge purchaser duty in addition. However, for the purpose of a property transfer between married or de-facto couples with a foreign transferee, the surcharge will remain at 8%.
If you would like any further advice in relation to property transfers, please contact a member of the Cheney Suthers team.