What is a partition?

Under section 30 of the Duties Act 1997 a partition is when dutiable property comprised of land in New South Wales that is held by persons jointly (as joint tenants or tenants in common) is transferred or agreed to be transferred to one or more of those persons bringing the existing co-ownership of the land to an end.

A concessional rate of duty applies to eligible partition transactions. The concessional duty is assessed based on the value of any excess interest received, rather than the full market value

The concessions are not restricted to instances where the partition involves one parcel of land, it can involve multiple parcels of co-owned land that are not adjoining and where each co-owner transfers their interest in a particular parcel to another co-owner.

Partition examples

Partition of a single parcel of land

Party A and Party B co-own a parcel of land in NSW as tenants in common (50/50). They subdivide the land into two lots: Lot X and Lot Y.  Following the subdivision, both parties still co-own both lots equally.

They agree to a partition where:

• Party A takes full ownership of Lot X.
• Party B takes full ownership of Lot Y.

This is an eligible partition because:

• The dutiable property is land in New South Wales.
• It was jointly owned before the transfer.
• The co-ownership ends, with each party taking full ownership of a separate lot.

Partition of multiple parcels of land

Party A and Party B co-own two separate lots (Lot X and Lot Y) in NSW as tenants in common, each holding a 50% share in both.

They agree to a partition where:

• Party A takes full ownership of Lot X.
• Party B takes full ownership of Lot Y.

This is an eligible partition because:

• The dutiable property is land in New South Wales.
• Both lots were jointly owned before the transfer.
• The co-ownership ends, with each party taking full ownership of a separate lot.

Liability date

Under section 12 of the Duties Act 1997, a liability for duty arises when a transfer of dutiable property occurs.

If a transfer of dutiable property is affected by a deed of partition or agreement, liability for duty charged by this chapter arises when the instrument is first executed.

Liable party

Under section 30(5) of the Duties Act 1997, duty is payable by the persons making the partition or any one or more of them.

When is duty payable?

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

If the partition is completed within three months, duty must be paid on or before completion.

How is interest 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).