In these current times of high costs of housing, it is not unusual for people going through a divorce or separation to agree that one person retains the family home and the other party to retain an investment property.

Transferring property in family law matters can be a sensible option and a way of preserving assets that have been acquired over a long period of time.

Fortunately, where property is transferred subject to family law Orders or binding financial agreements, stamp duty will be exempt.

Section 68 of the Duties Act, stipulates that stamp duty is not payable where property is transferred because of divorce or breakdown of a same -sex or heterosexual relationship.

Capital gains tax, applies to all changes in ownership involving property since 20 September 1985. When people separate and transfer investment properties, although the capital gains tax is not payable at the time of transfer, it is rolled over until such time as it is disposed off.

The spouse or partner that has retained the investment asset will be liable for capital gains tax calculated at the cost base of the asset.

The cost base is generally the price you paid to purchase the property and takes into consideration other costs of maintaining, holding and improving the asset.

Capital gains tax will apply in the following circumstances , where parties have separated after 20 September 1985:

  1. you transfer an asset or share of an asset to your spouse;
  2. you receive an asset or share of an asset from your spouse’;
  3. a company or trustee of a trust transfers an asset to you or your spouse.

Land tax needs to also be considered when transferring property in family law matters. Land tax does not apply to your principal place of residence.

Land tax may be payable on:

  • Holiday homes.
  • Vacant land.
  • Company title units.
  • Commercial properties including  factories and shops.

For further information on transferring property in family law matters, call us 02 8999 1800.

We have the expertise and knowledge and will give you and your family peace of mind in these matters.

The information provided here is of a general nature only and does not constitute legal advice.