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This chapter provides an overview of the key principles relating to the exemption for transfers between married couples and de facto partners for land used as their principal place of residence. This guide offers practical guidance through common scenarios and information on lodgement requirements to ensure compliance with Revenue NSW obligations.
Transfers between married couples
An exemption from duty may apply under section 104B of the Duties Act 1997 where there is an agreement or transfer between a married couple and the following criteria is satisfied:
As a result of the transfer or agreement, the property is or will be held by a married couple as joint tenants or as tenants in common in equal shares, and
The property is either:
Residential land on which there is a dwelling that, when the transfer of dutiable property occurs, is used as the principal place of residence of the married couple, or
A parcel of vacant residential land, or land on which there is a building under construction, intended to be used by the married couple as the site of a dwelling to be used as their principal place of residence, and
The residential land is used solely for residential purposes and not for any other purpose (such as a commercial, industrial or professional), and
Both the transferor and the transferee are the married couple or one of them and no other person is a party to the transfer.
An exemption from duty may apply under section 104B of the Duties Act 1997 where there is an agreement or transfer between de facto partners. The Duties Act Dictionary defines de facto partner as a person who has been a party to a de facto relationship for a period of not less than 2 years.
The following criteria must be satisfied for the exemption to apply:
As a result of the transfer or agreement, the property is or will be held by de facto partners as joint tenants or as tenants in common in equal shares, and
The property is either:
Residential land on which there is a dwelling that, when the transfer of dutiable property occurs, is used as the principal place of residence of the de facto partners, or
A parcel of vacant residential land, or land on which there is a building under construction, intended to be used by the de facto partners as the site of a dwelling to be used as their principal place of residence, and
The residential land is used solely for residential purposes and not for any other purpose (such as a commercial, industrial or professional), and
Both the transferor and the transferee are the de facto partners or one of them and no other person is a party to the transfer, and
The parties to the relationship have been in the relationship for at least two years before the date of the transfer.
Party A and Party B are married. Party A owns the home they are living in as their principal place of residence. The home is used solely for residential purposes.
Party A is transferring half of their interest in the property to Party B for no consideration, with the intention the property will be held as joint tenants.
A transfer is prepared to convey 50% of the property from Party A to Party B.
Result: Exempt
The property is used solely for residential purposes
The property is the married couple’s principal place of residence
No other person is a party to the transfer
As a result of the transfer, the property will be held by the married couple as joint tenants
Scenario 2: De facto partners
Party A and Party B have been in a de facto relationship for five years. Party A owns the home they are living in as their principal place of residence. The home is used solely for residential purposes.
Party A is transferring half of their interest in the property to Party B for no consideration, with the intention the property will be held as joint tenants.
A transfer is prepared to convey 50% of the property from Party A to Party B.
Result: Exempt
The property is used solely for residential purposes
The property is the de facto partners' principal place of residence
No other person is a party to the transfer
As a result of the transfer, the property will be held by the de facto partners as tenants in common in equal shares
The parties to the relationship have been in the relationship for at least two years before the date of the transfer
Scenario 3: Vacant land
Party A and Party B are married. Party A owns vacant land on which they intend to build their principal place of residence. The home, when built, will be used solely for residential purposes.
Party A is transferring half of their interest in the land to Party B for no consideration, with the intention the land will be held as tenants in common in equal shares.
A transfer is prepared to convey 50% of the property from Party A to Party B.
Result: Exempt
The married couple intends to build their home on the land
The home, when built, will be their principal place of residence and used solely for residential purposes
No other person is a party to the transfer
As a result of the transfer, the property will be held by the married couple as tenants in common in equal shares
Scenario 4: Transfer with consideration
Party A and Party B are married. Party A owns the home they are living in as their principal place of residence. The home is used solely for residential purposes.
Party A is transferring half of the property to Party B, with the intention the property will be held as tenants in common in equal shares. Party B is paying Party A $250,000 for the property.
A transfer is prepared to convey 50% of the property from Party A to Party B.
Result: Exempt
The property is used solely for residential purposes
The property is the married couple’s principal place of residence
No other person is a party to the transfer
As a result of the transfer, the property will be held by the married couple as tenants in common in equal shares
Note: A transfer is still exempt from transfer duty if there is consideration paid by the transferee, provided the criteria under section 104B of the Duties Act 1997 is satisfied.
Scenario 5: Change of land holding percentage
Party A and Party B have been in a de facto relationship for three years. Party A and Party B own the home they are living in as their principal place of residence. The home is used solely for residential purposes.
Party A is on title for 90% and Party B is on title for 10%. Party A wishes to change the ownership of the property to hold as joint tenants.
A transfer is prepared to convey 40% of the property from Party A to Party B.
Result: Exempt
The property is used solely for residential purposes
The property is the de facto partners' principal place of residence
No other person is a party to the transfer
As a result of the transfer, the property will be held by the de facto partners as tenants in common in equal shares
The parties to the relationship have been in the relationship for at least two years before the date of the transfer
Scenario 6: Property partly held by another person
Party A and Party B are married. Party A and Party C own a home as tenants in common in equal shares. The home is the principal place of residence for all parties and is used solely for residential purposes.
Party A is transferring half of their interest in the property to their spouse (Party B), so the property will be held as follows:
Party A = 25%
Party B = 25%
Party C = 50%
A transfer is prepared to convey 25% of the property from Party A to Party B.
Result: Exempt
The property is used solely for residential purposes
The property is the married couple’s principal place of residence
As a result of the transfer, the interest in the property previously held by Party A will be held by Party A and Party B (the married couple) jointly
No other person is a party to the transfer
Note: The exemption remains available even if the property is partially owned by a third party, provided the third party's interest remains unchanged. For more information refer to section section 104B(3) of the Duties Act 1997.
Scenario 1: De facto relationship for less than two years
Party A and Party B have been in a de facto relationship for one year. Party A owns the home they are living in as their principal place of residence. The home is used solely for residential purposes.
Party A is transferring half of their interest in the property to Party B for no consideration, with the intention the property will be held as joint tenants.
A transfer is prepared to convey 50% of the property from Party A to Party B.
Result: Not exempt
The property is used solely for residential purposes
The property is the de facto partners' principal place of residence
No other person is a party to the transfer
As a result of the transfer, the property will be held by the de facto partners as tenants in common in equal shares
Under section 104B(1)(e) of the Duties Act 1997 the parties are not considered de facto partners as they have not been in the relationship for at least two years before the transfer date
Scenario 2: Property not held jointly
Party A and Party B are married. The parties jointly own the home they are living in as their principal place of residence. The home is used solely for residential purposes.
Party A is transferring half of their interest in the property to Party B. As a result of the transfer Party B will be solely on title.
A transfer is prepared to convey 50% of the property from Party A to Party B.
Result: Not exempt
The property is used solely for residential purposes
The property is the married couple's principal place of residence
No other person is a party to the transfer
As a result of the transfer, the property will not be held by the married couple as joint tenants or tenants in common in equal shares
Scenario 3: Investment property
Party A and Party B are married. Party A owns an investment property.
Party A is transferring half of their interest in the property to Party B for no consideration, with the intention the property will be held as joint tenants.
A transfer is prepared to convey 50% of the property from Party A to Party B.
Result: Not exempt
The property is used solely for residential purposes
No other person is a party to the transfer
As a result of the transfer, the property will be held by the married couple as joint tenants
The property is not the married couple's principal place of residence
Scenario 4: Another party to the transfer
Party A and Party C own a home jointly that is used solely for residential purposes.
Party A marries Party B, and the home becomes the couple’s principal place of residence. Party C wishes to transfer their interest in the property to Party A’s new spouse.
A transfer is prepared to convey 50% of the property from Party C to Party B.
Result: Not exempt
The property is the married couple’s principal place of residence
The property is used solely for residential purposes
As a result of the transfer, the property will be held by the married couple as joint tenants or tenants in common in equal shares
A person outside the relationship is a party to the transfer
Under section 104B(1)(d) of the Duties Act 1997, both the transferor and the transferee must be the married couple or one of them or the de facto partners or one of them and no other person can be a party to the transfer.
Scenario 5: Transfer involving a non-individual
Party A and Party B are married, and their principal place of residence is owned by their company.
The couple wishes to transfer the property from their company into their own names to be held as joint tenants.
A transfer is prepared to convey 100% of the property from the company to Party A and Party B.
Result: Not exempt
The property is used solely for residential purposes
The property is the married couple’s principal place of residence
As a result of the transfer, the property will be held by the married couple as joint tenants
The transferor is not one of the parties to the marriage
The exemption does not apply if any transferor or transferee is a company, partnership or person acting in their capacity as trustee. Both the transferor and the transferee must be the married couple or one of them or the de facto partners or one of them.
Eligibility under section 104B of the Duties Act 1997 does not exclude any potential liability to surcharge purchaser duty. Liability to surcharge purchaser duty remains payable on the percentage interest acquired by a transferee deemed a foreign person under Chapter 2A of the Duties Act 1997.
Evidence of value is required to determine the value of the interest being acquired. Surcharge purchaser duty will be calculated on the greater of the consideration and the unencumbered value of that interest.
The following scenario demonstrates how a transfer can be exempt from transfer duty under section 104B but still be liable to surcharge purchaser duty.
Scenario: Foreign spouse that is a transferee
Party A and Party B are married. Party A owns the home they are living in as their principal place of residence. The home is used solely for residential purposes.
Party A is transferring half of their interest in the property to Party B who is a foreign person, with the intention the property will be held as joint tenants.
A transfer is prepared to convey 50% of the property from Party A to Party B.
Transfer Duty: Exempt
The property is the married couple’s principal place of residence
The property is used solely for residential purposes
No other person is a party to the transfer
As a result of the transfer, the property will be held by the married couple as joint tenants
Surcharge purchaser duty: Liable
The transferee is a foreign person.
Common errors
The information below is provided to prevent common assessment, processing and econveyancing errors identified by Revenue NSW under this document type.
Property transfer and land holding percentages
A frequent issue arises when processing these transactions, involving the property transfer percentage and land holding percentage.
In most section 104B transactions, the property transfer percentage is 50%. The land holding percentage of the incoming party is 100%, as they are receiving full ownership of the share of the property being transferred.
Example
Party A is transferring 50% of the property to Party B. The property transfer percentage is 50%. The land holding percentage is 100% as the transferee is receiving 100% of the 50% share being transferred.
To avoid an ad valorem duty assessment, enter the correct property transfer percentage in both the EDR and ELNO workspaces.
Surcharge purchaser duty
Where the transferee is deemed a foreign person under Chapter 2A of the Duties Act 1997, liability to surcharge purchaser duty remains payable on the percentage interest acquired by the transferee.
Evidence of value is required to determine the value of the interest being acquired. Surcharge purchaser duty will be calculated on the greater of the consideration and the unencumbered value of that interest.
To ensure surcharge purchaser duty is calculated correctly, when processing on EDR you must enter:
the consideration paid, and
the value of the interest being acquired.
Transactions that must be submitted via eDuties
As outlined in the Duties Document Matrix (PDF, 509.03 KB), the following transaction cannot be processed through Electronic Duties Returns (EDR) and must be lodged via eDuties for assessment by Revenue NSW.
Concession - Transfer of land used as principal place of residence and for other purposes
Section 104C of the Duties Act 1997 provides for a concession for mixed development land or mixed use land but only on the residential portion of the land that is used as the principal place of residence.
Example
Party A and Party B are married. Party A owns a property that they use as their principal place of residence and the site of their small business.
The value of the whole property is $800,000. The value of the non-residential portion is $300,000.
Party A is transferring half of their interest in the property to Party B for no consideration. A transfer is prepared to convey 50% of the property from Party A to Party B.
Under Section 104C of the Duties Act 1997, a concession applies so that only the non-residential portion is subject to transfer duty. As 50% of the property is being transferred, the dutiable value of the transfer is $150,000.
All transactions under section 104C must be lodged in eDuties under application type: Assessment - transfers of land used as the couple's / partner's principal place of residence and for some other non-residential purpose - section 104C.
The property is used solely for residential purposes
Under