At Sheridan Legal, we often get asked about the transfer of property (as opposed to the sale) between related parties.
It’s possible to do a transfer of property from one party to another.
One major cost that you will usually have to pay is stamp duty. However, there are a few situations where stamp duty is exempt (or at least, reduced).
You can transfer a rural property, primarily used for business, within the family to the next generation, and avoid stamp duty.
The property must be used for a primary production business. This may include using the land for grazing for dairy or beef cattle, sheep, goats or other animals, cultivating the land for crops, keeping of bees, growing flowers or other primary production business.
It’s important to remember that there may be other financial considerations to transferring a property. You should seek expert financial advice regarding taxation or other financial considerations.
Self-Managed Superannuation Funds (SMSF)
Stamp duty reductions are available for the transfer of a property to an SMSF.
Strict criteria apply which the property must meet. If the property meets the criteria, a reduced amount of stamp duty is payable to transfer the property to the SMSF.
Transfer of the family home to a spouse
If the family home is owned by only one spouse, this spouse can transfer the property into their name and their spouses name as joint tenants. This transfer of property will not incur stamp duty when it is their principal place of residence.
The main reason why a spouse would want a property to be held in joint names is to avoid future legal fees. If the property remained in one spouse’s name and they were to pass away, the cost of transferring the property into the surviving spouse’s name would be significant.
If the property is in joint names and a spouse passes away, the property can be transferred simply by registering a notice of death. The saving in legal fees is quite significant.
If you have any questions about the transfer of property, including the pros and cons, contact our team.