A recent settlement has highlighted the care that should be taken when adding or removing a party from a contract after it has been signed. Double Stamp Duty may be payable in some circumstances.
In this case, the wife was noted as the sole buyer but shortly after her offer was accepted she advised the agent she now wished to buy the property as a Joint Tenant with her husband.
The agent, concerned that the client could be charged double stamp duty, approached us to seek clarification.
Adding a buyer to a property transaction can be risky. Where the buyers aren’t related – let’s say the buyer now wanted to complete the purchase with a friend – additional duty would be payable.
In this case, however, the agent had nothing to worry about. Because the husband was a Related Person as defined by the Duties Act we were able to lodge a Substituted Purchasers form with the Office of State Revenue (OSR). There was no additional Duty payable and the transaction settled on time.
To reduce the likelihood of clients being charged additional duty it’s smart to ask buyers to clarify what names they want to appear on the title at the point of writing the offer.
Image by Alex Prolmos via Flickr.