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Transfer duty concession for deceased estate transfers
You may be eligible for the concessional transfer duty rate of $100 if you receive property from a deceased estate and the transfer meets certain requirements.
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In New South Wales (NSW) you must pay transfer duty when you buy a property, or a property is transferred into your name.
However, there is a concession if you receive dutiable property from a deceased estate.
An important concept for deceased estate transfers is whether the transfer is made under andin conformity with the trusts in the will, or is a result of a variation to those trusts which make the transfer not in conformity with the will.
This distinction determines how much transfer duty you will pay.
Eligibility requirements
You will qualify for the $100 concessional rate of transfer duty if all the following requirements are met.
You receive property from a deceased estate.
The property transfer is made by the executor or administrator of the deceased person's estate directly to you as a beneficiary.
The transfer is:
made under and in conformity with:
the deceased person’s will, including any codicil
intestacy laws (the laws that apply when someone dies without a will)
court orders if the will was contested, or
the subject of a trust for sale contained in the will of the deceased person, or
an appropriation of the property in or towards satisfaction of the beneficiary’s entitlement under the trusts contained in the will or arising on intestacy.
Under and in conformity
A transfer is in conformity when the property passes to you exactly:
as the deceased person intended in their will
according to intestacy laws, or
according to court orders if the will was contested.
The transfer must be made both under and in conformity with the terms of the will—it is not enough for the transfer to simply be consistent with those terms.
Beneficiaries who are foreign persons are not liable for surcharge purchaser duty if they receive the property in conformity with the will.
Example: Simple inheritance in conformity
Sarah's mother passed away and left Sarah the family home in her will. The executor transfers the property directly to Sarah exactly as stated in the will.
Because the transfer is made exactly in accordance with the will, Sarah pays the concessional rate of $100 in transfer duty.
Not in conformity
A transfer is not in conformity when beneficiaries agree to change or vary the original terms of the will.
This commonly happens when family members decide to distribute the estate differently than the will specified.
Key take away
Any variation from the exact terms of the will means that any portion greater than their entitlement in the property will be liable for standard transfer duty rates. Read more about how to calculate transfer duty.
You must provide a property valuation so Revenue NSW can calculate the duty on the varied portion.
Transferees who are foreign persons may be liable to surcharge purchaser duty on the dutiable value of the share transferred.
Example: Equal inheritance with buyout
Jo and Lee are siblings who are each entitled to receive 50% of their parent’s home under the will. The property is valued at $500,000.
Before the property is transferred from the estate, Jo and Lee enter a deed of family arrangement. Under the deed, Jo agrees to give up her interest in the property so that Lee will receive 100% ownership. In return, Lee agrees to compensate Jo with cash from outside the estate.
Because the property is transferred in a different way to what the will specifies, the transfer is not under and in conformity with the will.
Standard transfer duty applies to the additional 50% Lee receives as part of the buy‑out.
Duty on the additional 50% is calculated on the higher of the amount paid or the market value, and a property valuation is required.
Appropriation
Some wills include an appropriation clause, giving power to the estate trustees to determine how to distribute the estate's assets to the beneficiaries, provided the beneficiaries receive their entitlements under the will.
Any transfer of property that is part of the beneficiary's entitlements will receive the concessional rate.
Example: Appropriation
Under their father's will, Alex and Blake are each entitled to 50% of the residuary estate, comprising of property in Wollongong (valued at $1 million) and property in Mittagong (valued at $1 million).
The legal personal representative appropriates the assets so that Alex will take the entire Wollongong property and Blake will take the entire Mittagong property.
Under the rules of appropriation, Alex and Blake are each entitled to half of the total value of the properties being $1 million.
As both Alex and Blake receive a property that is equal to one half of the total value of the estate, the $100 concessional duty applies to each transfer.
Trust for sale situations
If the will directs the executor to sell the property and distribute the proceeds, but the beneficiaries agree to take the property itself instead according to their percentage entitlements, this may still qualify for the $100 concessional rate.
Example: Trust for sale
A will directs the executor to sell the deceased's investment property and divide the cash proceeds equally between three beneficiaries.
The beneficiaries and executor agree instead to transfer the property to all three beneficiaries as tenants in common in equal shares, rather than selling it.
Since the beneficiaries are receiving the property in the same proportions they would have received from the sale proceeds, the $100 concessional duty applies to the transfer.
Revenue Ruling DUT 046: Deceased estates explains the transfer duty concession for deceased estate transfers and provides examples of conformity and non‑conformity.
If you are a solicitor, conveyancer or accountant read the guide on assessing and processing deceased estate transfers using Electronic Duties Returns.
Video
The information in this video is of a general nature. Engage a solicitor or conveyancer for advice on your personal circumstances.
To apply for the concessional transfer duty rate on deceased estate property, you and your legal representative (solicitor or conveyancer) must gather all the following documents:
The original executed transmission application or transfer document.
A copy of the grant of probate along with the deceased's will.
A schedule showing the inventory of assets owned by the deceased at death.
If there is no will, a copy of the letters of administration confirming the deceased's assets.
Additional documents may be required depending on your situation:
If the will has been varied:
an explanation of how the change was decided, including copies of relevant documents or correspondence showing how the beneficiaries agreed to change the distribution, and
a professional property valuation report.
If the will was contested, copies of any court orders, as these act as amendments (codicils) to the will.
If the assets of the estate have been appropriated:
a copy of the plan of appropriation/distribution of all assets of the estate (include the beneficiaries who will be given assets), and
evidence of their market value.
How to apply
Transfer duty concessions are not automatic.
A solicitor or conveyancer (legal representative) should manage the assessment or application on your behalf as part of the property transfer process.
Your legal representative should:
advise you if you are entitled to the concession or if there are any issues
prepare all necessary transfer documents
complete and submit the concession assessment or application with Revenue NSW on your behalf
ensure all requirements are met and forms are correctly completed, and
In most cases, if the property transfer is under and in conformity with the will, your legal representative can process your duty assessment straight away.
If your transfer requires assessment by Revenue NSW, your legal representative can advise on when you can expect a decision about your application.
Duties Notice of Assessment
A Duties Notice of Assessment (Notice of Assessment) is a document from Revenue NSW that informs a purchaser or transferee of the amount of duty they must pay.
When your transaction has been assessed, your legal representative will receive a Notice of Assessment showing the Duty Assessed as:
an amount of $100 if you are eligible for the concession, or
the amount you must pay if you are not eligible for the concession.
Read more about paying duties, including what happens if you do not pay by the due date.
Note
If you are liable for surcharge purchaser duty, it will remain payable and be shown separately on your Notice of Assessment.
Objections and reviews
If we reject your application for a concession, you can lodge an objection within 60 days of the decision.
If your objection is unsuccessful, or Revenue NSW does not respond within 90 days, you have the right to seek a review by the NSW Civil and Administrative Tribunal (NCAT).
Call the duties team on 1300 139 814 or +61 2 7808 6916 if you are overseas. Staff are available Monday to Friday, 8.30am to 5.00pm AEST (excluding public holidays).
