A recent settlement has highlighted the hefty costs associated with re-writing an Offer and Acceptance contract after it’s been lodged with Revenue Online.
In this case, our client purchased a property under their name – let’s say Janet Smith. After the O&A was accepted and lodged with Revenue Online, the buyer phoned their agent requesting the contract be re-written in the name of her company, Janet Smith Pty. Ltd.
If the buyer was forced to change the contract because she could not get finance for the original purchase but can get finance for her company, stamp duty for the first contract is likely to be waived as one of its clauses was not fulfilled.
However, if the buyer simply changed their mind, or the agent wrote the incorrect name, she may end up paying stamp duty for both the original and the replacement contract.
As specified in the Office of State Revenue’s Cancelled Transactions Fact Sheet,
Duty is chargeable on a cancelled transaction if the transaction has been cancelled so that a replacement transaction or a subsale transaction can be entered into.
In effect, the buyer will be paying twice the stamp duty. If the real estate agent made the error in writing up the contract, not the buyer, the buyer may seek reimbursement for one lot of stamp duty – which could potentially involve solicitors.
Although it is yet to be completed, this case serves as a reminder to be thorough and careful in writing up O&A’s. A mistake that is only corrected after the contract has been lodged with Revenue Online could cost you or your client a lot of money.