Listen

Contracts for sale of land and transfers guide

The Contract for Sale of Land Guide offers detailed information on assessing transfer duty for contracts and transfers, along with a practical checklist to ensure all important factors are considered when making a Duties assessment.

While there may be differences in the way the terms, contract, agreement, or transaction are used, for the purposes of this guide, all these terms have the same meaning and involve a dutiable transaction over dutiable property.

For a comprehensive understanding, it is recommended that this guide is read in its entirety.

Chapters

  1. Overview
  2. Off the plan agreements
  3. Contract arrangements involving put and call options
  4. Aggregation of dutiable transactions
  5. Transfers in conformity/not in conformity
  6. Variation of contract
  7. Novation, nomination and assignment
  8. Declaration of trust in a contract for sale
  9. Determining the dutiable value
  10. Premium property duty
  11. Duty exemptions and concessions
  12. Surcharge purchaser duty
  13. Supporting evidence and audit requirements
  14. Lodgement and processing requirements
  15. Cancelled contracts, agreements and transfers

1. Overview

On this page

Chapter 2 of the Duties Act 1997 imposes duty on dutiable transactions relating to dutiable property. Contracts for sale of land and transfers are liable to duty under this chapter.

There are two key areas of the Duties Act that relate to the assessment of duty on a contract for the sale of land or standalone transfer.

Section 8(1) of the Duties Act 1997 determines what is a dutiable transaction, Section 11(1) of the Duties Act 1997 Act determines what is dutiable property.

A dutiable transaction not effected by a written instrument, including oral contracts, will still be liable to duty. See Section 15 of the Duties Act 1997 and Form OSD 046 - Statement for Dutiable Transaction not Effected by a Written Instrument.

When does a liability for duty arise?

A transaction is liable to duty from the date of its first execution, as specified in section 12 and section 295 of the Duties Act 1997.

Generally, when a liability for duty arises (the liability date) is determined by the type of transaction:

For a contract for sale of land or other agreement

The liability date is the date of first execution. In most cases with a contract for sale of land this will be the date of exchange.

When there is no other contract or agreement and the transfer of dutiable property is effected by an instrument

Liability for duty arises when the instrument is first executed. An electronic registry instrument is taken to be first executed when it is first digitally signed by a subscriber.

The addition of section 12(4)(b) of the Duties Act 1997 clarifies that if the electronic instrument is not digitally signed, it is taken to have been first executed when Revenue NSW first receives information relating to the instrument. This typically applies to transfers where there is no contract and will mean that the date the application for assessment is submitted in eDuties may be taken to be the execution date.

For all other transactions

The liability date is when a transfer of dutiable property occurs. For a more comprehensive summary of the liability date of these transactions refer to section 12 of the Duties Act 1997.

As liability arises on first execution, a liability will still exist even if the agreement is not executed by all parties.


If the transaction is not proceeding, the liability needs to be cancelled. See chapter 15 – Cancelled agreements or transfers.

Who is the liable party?

The person liable to pay the duty is the purchaser or transferee.

In the case of a nomination, a transferee includes the person who is nominated.

In the case of a novation, a transferee includes a person who obtains a right to exercise the option or purchase the land.

When is duty payable?

A duty liability arises when the document is first executed or signed.

Under Section 17 of the Duties Act 1997, duty is payable within three months from the liability date.

If the contract is settled (completed) within three months, duty must be paid on or before settlement.*

In specific circumstances, purchaser/transferees buying a residence off the plan may be eligible for a deferral of duty. For more information see Chapter 2 – off the plan agreements.

* See clause 10.9 of the ARNECC Model operating requirements.

How is interest on transfer duty calculated?

If payment is made after the due date (i.e. 3 months after the liability date) a tax default occurs and interest will be payable. In addition, penalty tax may be payable.

Interest is calculated daily from the end of the due date until the day duty is paid.

For further information about the current interest rates refer to Interest and penalty tax.

To calculate interest, you can use our interest calculator.

For more information see Part 5 of the Tax Administration Act 1996 No 97(TAA).

Assessment checklist for a contract for sale of land or transfer

The following non-mandatory checklist may be used as an assistance tool when making a duties assessment and can be kept on file for your future reference.

For full functionality of the PDF form, download it and save it to your computer before completing.