When does the liability for Transfer Duty arise?

In New South Wales purchasers of real property must pay Transfer Duty (previously known as stamp duty) within three months of signing a contract of sale or transfer, except in the case of particular off-the-plan purchases.

The amount of duty payable will be based on the higher of the property’s sale price and current market value, and may be determined at the standard duty rate, or at the premium duty rate, depending on the value of the property.

The amount of Transfer Duty payable may be determined using the Revenue NSW calculator:

Transfer Duty Calculator

Buying off-the-plan

A purchase will be considered off-the-plan (for the purposes of Transfer Duty) where the agreement includes the sale of land on which a residence is to be erected or developed before the contract is completed such as a unit, or a house.

Vacant land which is part of an unregistered subdivision (of which registration is required before completion can occur) is not off-the-plan for the purposes determining the liability for Transfer Duty.

Payment of Transfer Duty for off-the-plan purchases

Payment of Transfer Duty may be deferred for off-the-plan purchases by up to 12 months after contracts are executed, or until the property is completed or handed over (whichever occurs first), but only where at least one purchaser occupies the property as their main place of residence within the first 12 months of becoming the new owner, and they live at the property for at least six months.

The liability for Transfer Duty will arise:

1. on completion of the agreement;
2. on the assignment of the whole or any part of the purchaser’s interest under the agreement; or
3. on the expiry of 12 months after the date of the agreement.

Option agreements

An option agreement enables a buyer to exercise a call option to enter into an agreement to purchase real property. On entering the contract of sale, a buyer will be said to have exercised the call option. In NSW a buyer who exercises a call option will be liable to pay Transfer Duty three months after exercise of the option, only where they are not the person who entered the option agreement.

The transfer of an option to another person is also a dutiable transaction which is subject to Transfer Duty. Where a transfer of an option will be deemed to have occurred, and when the liability for Transfer Duty arises under different scenarios of the transfer of options are discussed at:

Transfers of options to purchase land | Revenue NSW

NSW Purchaser/Transferee Declaration form

Each person entering a transaction to acquire an interest in land in NSW must complete a NSW Purchaser/Transferee Declaration form. Once this form is completed your lawyer or conveyancer will upload to the electronic lodgement network which will trigger issue of the Duties Notice of Assessment of Transfer Duty.

For Individuals purchasing property in NSW the form is available at:

NSW Purchaser/Transferee Declaration – Individual

Explanatory notes to assist with completing this form are available at:

Explanatory Notes for the NSW Purchaser Declaration Transferee Form

If you are intending to exchange contracts with a lengthy settlement period, you should ensure that you understand when the liability for Transfer Duty will arise. At the very least this will provide clarity in respect of interest which may be incurred in the event that payment is late.

The content of this article is intended only to provide a summary and general overview on matters of interest. It is not intended to be comprehensive and does not constitute legal advice. Although all efforts are made to attempt to ensure that the content is current, this is not guaranteed. You should seek legal advice before acting or relying on any of the content.