Stamp Duty Concessions for Spouses in Canberra

What are the Stamp Duty exemptions for all parties in Canberra

Divorce and relationship breakdowns in the ACT are treated as a special case for stamp duty purposes, and there is a specific Stamp Duty in Canberra available to spouses.

Here’s a breakdown of how it works in Canberra if you’re selling a home due to a divorce and want to buy a new one.

Key Exemption for Property Transfer to a Former Partner

The primary exemption related to a family law property settlement applies to the transfer of property between former partners. If, as part of your divorce, your share of the family home is transferred to your former spouse, that specific transaction is exempt from stamp duty. This is because the transfer is considered a distribution of matrimonial property, resulting from the end of a relationship, rather than a typical market sale.

To be eligible for this exemption, the transfer must be formally documented through a legally recognised instrument, such as:

1. 1. A court order under the Family Law Act 1975. ( Consent Orders) 
   2. A Binding Financial Agreement (BFA) under the Family Law Act.

An informal agreement will not be sufficient to claim this exemption.

Stamp Duty Concession for Your New Home Purchase

This is the part that is particularly relevant to your situation. The ACT has a specific concession that assists an individual who has had to sell their home as a result of a relationship breakdown.

The ACT Home Buyer Concession Scheme (HBCS) has a specific provision for people who are separating from a domestic partner or spouse. This change was introduced to help individuals “get back on the property market” after a separation.

Under this specific provision, you may be eligible for a stamp duty concession on your new home purchase, even though you have previously owned a property. This is a significant exception to the general rule that the HBCS is for first-time home buyers only.

Eligibility for the Divorce-Related Concession:

1. The sale of your old home must be a result of the dissolution or irretrievable breakdown of a marriage or de facto relationship.
2. You must not be cohabitating with your former spouse/partner.
3. The transaction to transfer your share of the old property must have been formalised by a legal document like a court order or a Binding Financial Agreement.
4. You must meet the income thresholds and other eligibility criteria of the broader Home Buyer Concession Scheme. These thresholds are updated periodically, so it’s essential to check the current figures on the ACT Revenue Office website.

Type of exemptions

• Exemption for the Old Home: The transfer of your share of the old home to your former partner as part of your divorce settlement is generally exempt from stamp duty, provided it is done under a formal legal agreement or court order.
• Concession for the New Home: You may be eligible for a stamp duty concession on the purchase of your new home, even though you were a previous homeowner. This is a special provision under the Home Buyer Concession Scheme for individuals who have sold a property due to a relationship breakdown.
• Actionable Advice: The legal and financial implications of a divorce can be complex. It is highly recommended that you:
  • Consult a family law solicitor: They can help you with the legal documentation (court orders or BFAs) required to formalise your property settlement and qualify for the stamp duty exemptions.
  • Contact a conveyancer or the ACT Revenue Office: They can provide specific guidance on the eligibility criteria and the process for applying for the stamp duty concession on your new home.

What are the critical dates for Stamp Duty exemptions in  Canberra? 

Here are the critical dates and timeframes to be aware of:

1. The “Transaction Date”

This is the most critical date. For stamp duty purposes, the “transaction date” is the date you enter into the agreement to purchase the property (the date the contract is signed), not the settlement date. All eligibility for the HBCS is assessed based on this date.

• Your Eligibility: Your eligibility for the divorce-related concession is assessed at the transaction date. This means that on the day you sign the contract for your new home, you must meet the criteria related to the breakdown of your relationship.

2. The Formalisation of Your Property Settlement

To be eligible for the concession, the ACT Revenue Office requires evidence that your relationship has irretrievably broken down and that your former property was dealt with as part of a formal property settlement. This is to prevent people from using the scheme to buy a second home without a genuine need.

• Required Documentation: This is the most important part. You must be able to provide evidence of your property settlement. This can include:

1. A court order under the Family Law Act 1975.
2. A Binding Financial Agreement (BFA) under the Family Law Act.
3. A deed of settlement or other formal separation agreement.

There is no specific timeframe for how long after the divorce the purchase of the new home must occur. The key is that the reason for the sale of the former home and the purchase of the new one is demonstrably a result of the relationship breakdown, supported by the necessary legal documents.

3. The Residency Requirement

One of the core conditions of the HBCS is that you must occupy the new property as your principal place of residence for a continuous period.

• Timing: You must begin living in the home within 12 months of the settlement date.
• Duration: You must then reside in the property for a continuous period of at least 12 months.

Suppose your circumstances change and you cannot meet this requirement. In that case, you must notify the ACT Revenue Office, as you may become ineligible for the concession and be required to pay the full stamp duty amount, along with any penalties or interest.

Summary of Key Dates and Events:

1. Relationship Breakdown: This is the event that makes you potentially eligible for the concession.
2. Formal Property Settlement: You must have a legally binding agreement (BFA or court order) regarding the division of your former property. This is the evidence you will need to provide.
3. Transaction Date: The date you sign the contract for your new home. Your eligibility for the concession is assessed on this day.
4. Settlement Date: The date you take legal ownership of the new property.
5. Residency Period: You have a 12-month window from the settlement date to move into the new home, and you must then live there for a continuous period of at least 12 months.

It is crucial to work with a conveyancer or a family law solicitor who has experience with ACT property transactions to ensure you meet all the specific requirements and have the correct documentation. The rules and eligibility criteria are subject to change, so always refer to the official ACT Revenue Office website for the most current information