A Contract for the Sale and Purchase of Land becomes binding when the counterpart copy of the Contract signed by the Vendor is exchanged with the counterpart copy of the Contract signed by the Purchaser.
In a recent case, a husband exchanged contracts through the Real Estate Agent and afterwards sought to add his wife’s name to the contract.
Generally speaking, a Transfer (the document handed over by the Vendor to the Purchaser on settlement and then lodged at the Land Titles Office to transfer title to the property to the Purchaser) must be in conformity with the Contract. In other words, the description of the Purchasers on the Contract must be identical to the description of the Transferees on the Transfer – if not, additional stamp duty may be payable.
If there is any difference in the name of the Purchasers on the Contract as compared to the Transfer, the Commissioner for Stamp Duty will regard the transfer of a part of the interest in the property to the new Purchaser as a “sub-sale” of the property, as the Transfer is not in conformity with the Contract, thereby incurring further stamp duty – double stamp duty.
There is an exemption from double stamp duty for a Transfer not in conformity with the Contract, where the new Purchaser to be placed onto the contract is related to the original Purchaser.
This is provided for in Section 18 of the Duties Act, 1997 which provides that only an additional nominal amount of $10.00 instead of double stamp duty will be payable on a Transfer not in conformity with the Contract, provided that –
- The duty chargeable in respect of the Contract has been paid, and
- The Transfer would be in conformity with the Contract if the transferee was the purchaser under the Contract, and
- The transfer occurs at the same time as, or proximately with, the completion or settlement of the Contract, and
- At the time the Contract was entered into, and at the completion or settlement of the Contract, the purchaser under the Contract was a related person, or if purchased by a trust, the person was a beneficiary.
For the purpose of the Duties Act, 1997, a “spouse” is a related person and includes a married spouse, a defacto spouse or a same sex spouse.
So, the good news for our client mentioned at the beginning of this article, was that we were able to prepare a Statutory Declaration to confirm the marriage between him and his wife, enabling us to prepare a Transfer not in conformity with the Contract which was only subject to additional nominal stamp duty of $10.00 instead of full double stamp duty.
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