Legal Tip 89: Stamp duty on Off the Plan purchases in NSW

With property purchases in NSW liability to pay stamp duty arises on execution of the contract of sale. s12(2) Duties Act 1997 (NSW) http://www5.austlii.edu.au/au/legis/nsw/consol_act/da199793/s12.html


But payment can be deferred for up to 3 months because of s17 http://www5.austlii.edu.au/au/legis/nsw/consol_act/da199793/s17.html (however where the property is being mortgaged the duty will need to be paid about 2 weeks before settlement).


BUT, where the property is off the plan the rules are different. s49A makes the liability arise on the earlier of

• settlement,
  
  
• assignment, or
  
  
• 12 months after the date of the contract
  

http://www5.austlii.edu.au/au/legis/nsw/consol_act/da199793/s49a.html


However, you will still have up to 3 months to pay because of s17.


Off the plan is defined at s49A(4) as:

“"off the plan purchase agreement" means an agreement for the sale or transfer of dutiable property, being land on which a residence is to be erected or developed before completion of the sale or transfer.”

 

Note that new laws have been introduced in NSW so that 'foreign persons' do not get the 12 months to pay for duty for off the plan purchases. They must pay duty within 90days.

 

It's been a while since this strategy, but buying of the plan on a Put & Call Option still get around the issue of having to pay the stamp duty early on these long settlement properties?

 

Not in NSW or VIC.

 

OTP valuation is also determined by the vendor and NOT what your contract says.