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.
Property professionals guide: Contracts for sale of land
Variation of contract
Guidance for property professionals on transactions where there is a variation to the contract or agreement, including common scenarios and when duty applies.
Last updated:
On this page
Once a contract/agreement for sale of land is executed by both parties it becomes legally binding on those parties. In most cases, where the parties to the agreement wish to change any of the terms and conditions, they agree to vary the agreement. This is often effected by a deed of variation or deed of amendment.
Common variations to agreements for sale or transfers can include:
the consideration under the agreement is increased.
the consideration under the agreement is reduced because the parties have agreed not to transfer some of the dutiable property previously agreed to be transferred.
the vendor may agree to a reduction in purchase price after exchange as a result of an adverse building inspection.
for off the plan purchases where there is an expansion or reduction in area, or the purchase of additional car spaces/storage spaces or upgrades to the finishes of the property.
Where the variation to an agreement for the sale or transfer occurs before the property is transferred, the agreement or transfer will be assessed/re-assessed for duty in accordance with the change in the consideration.
When does the liability occur?
Under section 31 of the Duties Act 1997, the liability to pay additional duty arising from an increase in the consideration occurs on the date the consideration is agreed to be increased (date of the variation agreement).
What is the rate of duty?
Duty is payable on the higher of the consideration, as varied or the market value.
The duty liability will be calculated using the rate of duty applicable at the time the contract for sale was first executed.
Under section 18(1) of the Duties Act 1997 variation agreements are liable to a fixed rate of duty of $100 plus $20 for each duplicate. For this section to apply the variation of contract must be entered into after the contracts are exchanged and before the property is transferred.
At settlement, the consideration on the transfer should reflect the varied amount.
Variation of contract scenarios
Where a variation of contract has occurred, the following table is provided to assist practitioners with how to manage the transaction. It details which scenarios can be processed using Electronic Duties Returns (EDR) and which require lodgement with Revenue NSW for assessment via eDuties.
If the dutiable amount is increasing
and
then
- the contract has not been assessed
in EDR, assess the contract and transfer for the increased dutiable amount, and
assess the variation deed under document type ‘variation of contract’ for $100.00 fixed duty.
- the contract has been assessed on the original contract price, and - duty has not been paid
in EDR, process a new Duties assessment on the increased dutiable amount, then
assess the variation deed under document type ‘variation of contract’ for $100.00 fixed duty.
- the contract has been assessed on EDR on the original contract price - duty has been paid
in EDR, assess the variation deed under document type ‘variation of contract’ for $100.00 fixed duty.
settle on the reduced amount in the ELNO workspace
after settlement, lodge the contract and variation deed for reassessment in eDuties under application type: Reassessment - alteration in purchase price - section 31.
