How can the family law process save you money?

by Peter Magee on October 9, 2014

Peter Magee

A reason why former partners should legally formalise their property settlements is so that they are exempt in some circumstances from paying duty for house and land transfers. This could result in a substantial monetary saving for one or both parties.

Stamp duty or Transfer duty (“duty”) is calculated on the value of the property or the money paid for the property. Duty is usual paid for the transfer of title on your house and land. When former partners jointly own property such as the family home and one party wishes to keep the property this transfer or “purchase” of the other parties share is still subject to duty. So even though you are transferring the family home to your former partner you are still “selling” your share of the family home which would attract duty for the person “purchasing” the others share. This is avoided when parties enter into consent orders or a financial agreement.

The current duty rates that apply to transfers of real property in Queensland are as follows:

Dutiable value

Duty rate

Up to $5,000.00

Nil

$5,000 to $75,000

$1.50 for each $100, or part of $100, by which the dutiable value is more than $5,000

$75,000 to $540,000

$1,050 plus $3.50 for each $100, or part of $100, by which the dutiable value is more than $75,000

$540,000 to $1,000,000

$17,325 plus $4.50 for each $100, or part of $100, by which the dutiable value is more than $540,000

More than $1,000,000

$38,025 plus $5.75 for each $100, or part of $100, by which the dutiable value is more than $1,000,000

*These rates are subject to change and you should check with Armstrong Legal at the time of transfer to calculate the exact amount of duty that may be payable.

Example – Family Home valued at $500,000.00

According to the Queensland Government Office of State Revenue website www.osr.qld.gov.au/calculators for a residential primary place of residence where the current purchase price is $500,000 the current transfer duty payable would be $8,750.

So if James and Jacquie own a $500,000 family home together as joint tenants and Jacquie wishes to retain the family home she would need to purchase James share. By purchasing James share of the family home Jacquie would be required by the Queensland Government to pay approximately $4,375 in Stamp duty.

Exemptions are available to parties who enter into consent orders or a financial agreement where the property is to be transferred to one party. The exemptions generally only apply to properties owned by individuals.

If James and Jacquie negotiate an agreement whereby Jacquie keeps the family home through a transfer of a James’ share in the property, and they formalise that agreement through either consent orders or a financial agreement, Jacquie would be not be required to pay duty on the transfer.

For more information on how to enter into consent orders or a financial agreement make an appointment with Armstrong Legal.

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