Transfer: What Happens to Property When a Relationship Breaks Down?
The breakdown of a relationship can be an incredibly stressful and sad time in someone’s life. The burden of having to organise the couple’s joint assets (think property, bank accounts, physical items like furniture, white goods and electronics) adds another layer of stress on top of the emotional weight.
We have had a number of clients recently who have come to us to finalise the transfer of property based on the party’s final wishes. What we are finding is that younger couples who have broken up now commonly have property as an asset.
This is because of a number of reasons including young people are getting married later but are working together to purchase a property before marriage because prices are so expensive.
Let’s take a look at the process to secure a stamp duty exemption to ensure that the party taking ownership of the property doesn’t incur a hefty bill.
State Revenue Office Stamp Duty Exemption
A transfer of dutiable property (ie. property that would attract stamp duty) made solely because of a breakdown of a marriage or domestic relationship is exempt (ie. doesn’t have to pay stamp duty) where:
- The transferor is a party or both parties to the breakdown of a marriage or domestic relationship, and
- The transferee is a party or both parties to the marriage or domestic relationship, and
- No other person takes or is entitled to take an interest in the property.
What’s a Domestic Relationship?
You should know if you’re married or not so let’s focus on what is a domestic relationship for the purposes of the duty exemption.
A domestic relationship is defined in the Duties Act 2000 as either a registered domestic relationship or ‘a relationship between two persons who are not married to each other but who are living together as a couple on a genuine domestic basis (irrespective of gender)’.
Does your relationship fit within that definition? All of our clients who were living together as a couple in their home before the breakdown have fitted into this category.
Because there are two parts to the transfer, once the exemption has been granted (providing you fit within the definition in the Duties Act 2000), your lawyer will then co-ordinate with your outgoing mortgagee and incoming mortgagee to register the transfer.
This is assuming of course that you need to pay out the current mortgage which is registered in both names and you have a new mortgage in one parties name with a different lender.
If you would like to know more or would like to organise a property transfer and stamp duty exemption please send us an email and one of the Your Property Australia lawyers will get in contact with you.