Visit the key dates for payroll tax webpage and schedule these dates in your calendar to avoid missing lodgement dates and additional costs associated with late lodgement.
Learn more about becoming a shared equity partner approved by the Chief Commissioner of State Revenue, to support home buyers in purchasing property in NSW.
This chapter provides an overview of the key principles relating to the exemption for the break-up of marriages and other relationships and offers practical guidance through common scenarios. You will also find information on lodgement requirements to ensure compliance with Revenue NSW obligations.
Break-up of marriages and other relationships
Where there is an agreement or transfer of dutiable property as a result of a breakdown of a marriage, de facto relationship or domestic relationship, the agreement or transfer may be eligible for an exemption under section 68 of the Duties Act 1997if specific criteria is met, and the property is transferred to:
a party to the marriage or relationship.
a child or children of either of the parties to the marriage or relationship or a trustee of this child or children.
a trustee under the Bankruptcy Act 1966 of the Commonwealth of the estate of either of the parties to the marriage or relationship.
The exemption is conditional on the Chief Commissioner being of the opinion that the marriage has broken down irretrievably or the de-facto or domestic relationship has been terminated. The agreement or transfer must be effected by or in accordance with the relevant documents set out under section 68(1)b of the Duties Act 1997 as detailed below.
To satisfy the requirements for exemption under section 68(1) of the Duties Act 1997, the transfer or agreement must be effected by, or in accordance with:
a financial agreement made under section 90B, 90C or 90D of the Family Law Act 1975 certified in accordance with section 90G of that Act of the Commonwealth that, under that Act, is binding on the parties to the agreement, or
an order of a court under that Act, or
an agreement that the Chief Commissioner is satisfied has been made for the purpose of dividing matrimonial property* as a consequence of the dissolution, annulment or breakdown of the marriage, or
a purchase at public auction of property that, immediately before the auction, was matrimonial property where the public auction is held to comply with any such agreement or order.
*Matrimonial property means property in relation to the parties to a marriage or of either of them (within the meaning of the Family Law Act 1975 of the Commonwealth), including any property treated as property in relation to the parties or of either of them as a result of an order made under that Act.
Note: The exemption does not extend to a financial agreement made under section 90B, 90C or 90D of theFamily Law Act 1975 of the Commonwealth if the marriage has not ended.
Steps for assessing transfers as a result of a break up of marriage
Confirm that the document effecting the transfer (financial agreement, court order or agreement) is made in accordance with the breakdown of the marriage.
3
Identify all parties involved
Ensure that all parties involved in the transaction are either:
a party to the relationship,
a child or children of either party, or a trustee for such a child or children, or
a trustee under the Bankruptcy Act 1966 of the Commonwealth of the estate of either of the parties to the marriage.
4
Identify property being transferred
Confirm the specific property being transferred is clearly identified in the financial agreement, court order or agreement.
5
Confirm transfer
Verify that the transfer is in accordance with the terms set out in the relevant financial agreement, court order or agreement.
If all the above criteria is not met, the exemption will not apply. A transfer will be liable to ad valorem duty and evidence of value will be required to determine the dutiable value of the property being transferred.
To satisfy the requirements for exemption under section 68(1A) of the Duties Act 1997, the transfer or agreement must be effected by, or in accordance with:
a financial agreement made under section 90UB, 90UC or 90UD of the Family Law Act 1975 certified in accordance with section 90UJ of that Act of the Commonwealth that, under that Act, is binding on the parties to the agreement, or
an order of a court under that Act, or
an agreement that the Chief Commissioner is satisfied has been made for the purpose of dividing relationship property* as a consequence of the breakdown of the relationship, or
a purchase at public auction of property that, immediately before the auction, was relationship property where the public auction is held to comply with any such agreement or order.
*Relationship property means property in relation to the parties to the de facto relationship or of either of them (within the meaning of the Family Law Act 1975 of the Commonwealth), including any property treated as property in relation to the parties or of either of them as a result of an order made under that Act.
Note: The exemption does not extend to a financial agreement made under section 90UB, 90UC or 90UD of the Family Law Act 1975 of the Commonwealth if the marriage has not ended
Steps for assessing transfers as a result of a break up of a de-facto relationship
Confirm that the document effecting the transfer (financial agreement, court order or agreement) is made in accordance with the breakdown of the de-facto relationship.
3
Identify all parties involved
Ensure that all parties involved in the transaction are either:
a party to the relationship,
a child or children of either party, or a trustee for such a child or children, or
a trustee under the Bankruptcy Act 1966 of the Commonwealth of the estate of either of the parties to the de facto relationship.
4
Identify property being transferred
Confirm the specific property being transferred is clearly identified in the financial agreement, court order or agreement.
5
Confirm transfer
Verify that the transfer is in accordance with the terms set out in the relevant agreement or court order.
Note: If all the above criteria is not met, the exemption will not apply. A transfer will be liable to ad valorem duty and evidence of value will be required to determine the dutiable value of the property being transferred.
a purchase at public auction of property that, immediately before the auction, was relationship property* where the public auction is held to comply with any such order or agreement.
*Relationship property means property in relation to the parties to the domestic relationship or of either of them.
Steps for assessing transfers as a result of a break up of a domestic relationship
The following sets out the process required to confirm if a transfer meets the eligibility for an exemption under section 68(2) of the Duties Act 1997.
Confirm that the document effecting the transfer (the termination agreement or court order) is made in accordance with the breakdown of the domestic relationship.
3
Identify all parties involved
Ensure that all parties involved in the transaction are either:
A party to the relationship,
A child or children of either party, or a trustee for such a child or children.
4
Identify property being transferred
Confirm the specific property being transferred is clearly identified in the termination agreement or court order.
5
Confirm transfer
Verify that the transfer is in accordance with the terms set out in the termination agreement or court order.
Note: If all the above criteria is not met, the exemption will not apply. A transfer will be liable to ad valorem duty and evidence of value will be required to determine the dutiable value of the property being transferred.
Under section 68 of the Duties Act 1997, an agreement that the Chief Commissioner is satisfied has been made for the purpose of dividing relationship property, as a consequence of the breakdown of a marriage or de facto relationship, can be accepted in lieu of a court order or binding financial agreement.
To be processed through EDR the agreement must:
Clearly state the marriage or de facto relationship has irretrievably broken down
Name the parties to the marriage or de facto relationship (and any children if relevant to the property division)
Identify the matrimonial or relationship property being transferred
Specify how the property is to be transferred or divided between the parties
Be signed by both parties
The exemption can only apply where the transfer of the matrimonial or relationship property is in accordance with the agreement and transfers the property to:
a party to the relationship, or
a child or children of either party, or a trustee for such a child or children, or
a trustee under the Bankruptcy Act 1966 of the Commonwealth of the estate of either of the parties to the de facto relationship.
If the Chief Commissioner is not satisfied the agreement was made for the purpose of dividing relationship property, the agreement will remain liable to ad valorem duty and evidence of value will be required to determine the dutiable value of the property being transferred.
Lodgement or processing requirements
Transfers made in accordance with the above can be processed on EDR if all parties involved are natural persons (not companies or trustees).
Common scenarios
Here are common scenarios relating to the break-up of marriage and other relationships that may assist in making a determination on whether the transaction is exempt or liable to transfer duty.
Scenario 1: Transfer as a result of a break up of marriage - exempt
Party A and Party B are divorced. Party A holds the title to a property.
A court order made under the Family Law Act 1975 directs:
Party B pay $250,000 to Party A
The property is to be transferred to Party B
A transfer is prepared to convey the property to Party B for a consideration of $250,000.
Result:
The transfer is in accordance with the court order made under the Family Law Act 1975.
Scenario 3: Transfer as a result of a break up of a de facto relationship - liable
Party A and Party B’s relationship has broken down irretrievably. They hold the title to one property as joint tenants.
A binding financial agreement made under section 90UB of the Family Law Act 1975 specifies the property is to be transferred to Party B and Party C (new partner) to hold as tenants in common, as to 70% and 30% respectively.
A transfer is prepared to convey the property to Party B and Party C.
Result:
The transfer is in accordance with the binding financial agreement made under the Family Law Act 1975
a child or children of either of the parties to the broken down relationship.
Ad valorem duty is payable on the full value of the property as a partial exemption cannot apply under section 68 of the Duties Act 1997.
Evidence of value is required to determine the dutiable value of the property.
Scenario 4: Transfer as a result of a financial agreement - no marriage break up - liable
Party A holds the title to a property. A financial agreement is entered into either under 90B or 90C of the Family Law Act 1975. There is a transfer of property from Party A to Party B (the spouse of Party A) in accordance with the financial agreement.
The marriage has not ended or broken down irretrievably.
Result:
The transfer is not eligible for an exemption under section 68 of the Duties Act 1997as the marriage has not ended or broken down irretrievably.
Ad valorem duty is payable on the value of the property.
Evidence of value is required to determine the dutiable value of the property.
This result would apply in the same way to a de facto relationship that has not been terminated.
Scenario 5: Transfer to a discretionary trust - liable
Party A holds the title to a property. A binding financial agreement specifies the property is to be transferred to the trustee of a discretionary trust where Party B (the spouse of Party A) and the children of the marriage are the beneficiaries.
A transfer is prepared to convey the property to the trustee of the trust.
Result:
The transfer is liable to duty as a trustee who holds property on behalf of a discretionary trust does not satisfy the requirements of section 68 of the Duties Act 1997. A transferee who holds property in their capacity as trustee of a trust is not receiving the property in their capacity as a party to the marriage.
Evidence of value is required to determine the dutiable value of the property.
If the provisions of section 68 of the Duties Act 1997 are not satisfied, surcharge purchaser duty will be payable if the transferee is a foreign person and the property is residential-related property.
Transactions that must be submitted via eDuties
As outlined in the Duties Document Matrix, certain transactions cannot be processed through Electronic Duties Returns (EDR) and must be lodged via eDuties for assessment by Revenue NSW. These include:
Transfers resulting from the breakdown of a marriage, de facto, or domestic relationship, where the transferee or transferor is not a natural person (e.g., a company or trust).
Transfers of superannuation interests arising from the dissolution of a marriage or de facto relationship.
Transfers to a deceased person's legal personal representative following the breakdown of a marriage, de facto, or domestic relationship.
