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Transfer duty exemption for transfers between spouses and de facto partners
An exemption or concession may apply if your spouse or de facto partner transfers an interest in their home to you so you both own an equal share.
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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 may be an exemption or concession for transfers or agreements between spouses or de facto partners.
Eligibility requirements
You will be exempt from paying transfer duty if you meet all the following requirements:
Property is transferred to you by your spouse or de facto partner. De facto partners must have lived together for at least 2 continuous years before the date of the transfer.
The property being transferred is:
a residential dwelling used as your principal place of residence (PPR), or
vacant land that you intend to use as the site of your PPR.
Each spouse or partner will own equal shares in the property (as joint tenants or tenants in common) after the transfer or agreement. If the property is owned with others outside of the marriage or relationship, the transfer must:
result in equal shares for the couple, and
not change the share of any other parties.
To obtain the full exemption, the property is used solely for residential purposes and not for business or commercial purposes.
What is a principal place of residence
This is your home where you live most of the time.
Key points about PPR:
It is the one place of residence where you primarily reside with your spouse or de facto partner.
It must be a place where you live, not just a property you own.
It is a single dwelling that can be:
a house on land
an apartment (e.g. strata title), or
vacant land where you intend to build your home.
For a full exemption, it must be used solely for residential purposes and no other purposes.
Please note, the exemption is not available for properties that are not your PPR, such as holiday homes or investment properties.
The term residential land relates to:
property on which there is a single dwelling, or
vacant land zoned for residential purposes or principally for residential purposes.
Fly-in-fly-out workers or frequent travellers
You and your spouse or partner may have occasional or regular absences from your home for travel or work, including fly-in-fly-out (FIFO) arrangements, as long as:
the property is maintained as your base (the place you return to when not working away or travelling), and
you do not claim another property as your PPR during those absences.
Mixed-use properties
If you use a single room in your home for business purposes (like a home office), you may still qualify for the full exemption if the business is primarily conducted elsewhere.
However, if you use more than one room for business, or the property has mixed residential and commercial use, you may receive a concession (partial exemption) on the residential portion only.
Please note, you will need a solicitor or conveyancer to lodge a concession application for you.
What is a spouse or de facto partner
A spouse is a person you are married to. Marriage is the legally recognised union of two people, entered voluntarily.
When two adults live together as a couple but are not married to each other, they are de facto partners.
To qualify for the transfer duty exemption as de facto partners, you must:
be in a relationship where you live together as a couple
not be married to each other
not be related by family, and
have lived together for at least 2 continuous years before the date of the transfer.
The 2-year requirement for de facto partners is strict for this exemption, even though other laws may recognise de facto relationships that have lasted less time.
Foreign spouses and partners
If you are considered a foreign person, you may still be liable for surcharge purchaser duty even if you meet the eligibility requirements for this exemption.
In most cases, your legal representative can process your duty assessment straight away if you qualify for the exemption.
If your transaction 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 application has been assessed, your legal representative will receive a Notice of Assessment showing the Duty Assessed as:
a nil balance if you are eligible for the exemption, or
the amount you must pay if you are not eligible for the exemption.
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 an exemption, 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).
Terry owns a residential property in NSW with his brother Jordan in equal shares.
Terry and his wife Phillipa live in the property as their principal place of residence and Jordan lives in Western Australia.
Terry wants Phillipa to share ownership of their home. He wants to split his 50% share with Phillipa so they both own 25% each.
Terry and Phillipa are eligible for the exemption because:
they are married
the property is their principal place of residence
the property will be held in equal 25% shares after the transfer, and
the transfer does not change Jordan’s share.
Example 2: De facto partners equalising ownership
Arjun and Emma are de facto partners who have lived together for three years.
They currently own their home as 70% Arjun and 30% Emma. They want to adjust this to 50/50.
They are eligible for the exemption because:
they have been living in a de facto relationship for more than 2 years
the property is their principal place of residence, and
it will be held equally after the transfer.
Example 3: Home office
Davina and Meredith are married and want to transfer their residential family home into both names equally.
Davina uses one bedroom as a home office for her consulting business, but most of her work is done at client offices.
They may be eligible for the exemption because:
they are married
the property is their principal place of residence
the property will be held equally after the transfer
only a single room is used for the business, and
the business is primarily conducted elsewhere.
However, they should discuss this with their solicitor to confirm.
Example 4: Partial business use
Rodrigo and Tamika have been in a de facto relationship for five years. Tamika owns a residential property with a house and a separate granny flat.
Rodrigo uses the granny flat as a workshop for his carpentry business. They want to transfer the property into both names equally.
They are not eligible for the full exemption because a substantial portion of the property is used for business purposes.
However, they may be eligible for a partial concession on the residential portion of the property, because:
they have been in a de facto relationship for more than 2 years
the property is their principal place of residence, and
the property will be held equally after the transfer.
However, they should discuss this with their solicitor to confirm.
Example 5: Vacant land
Sienna purchased a block of land when she was single. She then married Lucas.
Sienna wants to transfer 50% of the ownership in the vacant land to Lucas. They plan to build their family home on the land and live in it as their PPR.
They are eligible for the exemption because:
they are married
the property will be owned equally after the transfer, and
they intend to build their PPR on the vacant land.
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).
