Sometimes it is necessary to transfer the ownership of a property without a sale or purchase arrangement. This generally occurs when an owner or co-owner of real estate dies, or when a relationship breaks down. There are other circumstances leading to the transfer of a share in property, such as the gifting of property to children, or for the protection of assets.
When it comes to the transfer of property, it is important to obtain professional advice to ensure that the process is completed correctly and that you do not trigger any unexpected tax or duty liabilities. A conveyancer can help you complete and file the correct forms and pay the right stamp duty, which will depend on the circumstances of the transfer. Your conveyancer can also advise on what documents are required for the assessment of transfer duty or a duty concession.
We recommend consulting a tax accountant to advise on any capital gains or taxation implications and the general financial effect of your proposed transfer.
Deceased estates
If a loved one has passed away, it can be a stressful time. Where they owned real property, it will be necessary to take steps to transfer that property in accordance with the survivorship provisions in the case of property held in a joint tenancy, or the instructions of a Will or, in the absence of a Will, consistently with the laws of intestacy. This can be a confusing time in circumstances that are generally already difficult.
Where property is to be transferred following the proprietor’s death, a transmission application must be made. The relevant form to be used depends on whether the party is a beneficiary or next-of-kin or if they are an executor or administrator. Whether there is nominal stamp duty or no stamp duty to be paid also depends on the role of the party receiving the property (the transferee).
Relationship breakdowns
In the unfortunate event of the breakdown of a relationship, property may need to be transferred between parties as agreed or consistent with an order of the court. In these circumstances, you may be entitled to an exemption on stamp duty. To claim the exemption, your agreement to transfer property must be documented in a complying binding financial agreement, or consent orders from the court.
Severing tenancy
If you have purchased property with another party, at the time of purchase you will have elected to purchase the property as joint tenants or tenants in common. Where you own property as joint tenants, upon the death of a tenant, their share is automatically left to the surviving tenant/s. In contrast, tenants in common can leave their share of a property to anybody upon their death, as devised in their Will or subject to the rules of intestacy.
If you are a joint tenant and wish to leave your property to somebody other than the other tenant, it is necessary to sever the joint tenancy first. This can be done by filing the appropriate form, depending on whether all tenants wish to sever the joint tenancy or if only one tenant wishes to do so.
Property transfers, other than a standard sale and purchase, can arise for a variety of reasons. Some are relatively straight-forward, however some can be quite complex, particularly where the transfer follows a relationship breakdown or dispute between the owners. In all cases, we recommend seeking legal and financial advice to ensure you avoid any pitfalls and understand the implications of your transfer.
If you need assistance, contact us at [email protected] or call (02) 4268 6795 for expert conveyancing advice.