Stamp duty is paid on a whole variety of transactions, but most importantly for this article when houses and real estate interests are transferred. When husbands and wives split up, provided they transferred their property pursuant to orders made under the Family Law Act then they were exempt from paying duty on the transfer. This was because of section 90 of the Family Law Act and corresponding provisions of the Duties Act.
It was then seen that transfers pursuant to a binding financial agreement were also exempt, as were transfers pursuant to court order or recognised agreement for de facto couples.
That's the easy bit.
Some months ago, I posted about how the OSR changed its rulings. This was because the previous situation was unclear. Previously, it appeared that duty might be charged if a transfer was to or from someone who was not the husband or wife. Typically this might be the company of one of them.
That's what the effect of rulings by the OSR meant, even though s.90 of the Family Law Act said otherwise (that the transfers were exempt). In practice it was not so clear. In a couple of cases I advised clients to put aside in excess of $10,000 for anticipated duty, but in those cases the OSR did not charge duty.
Then the OSR, as I posted before, changed its ruling. Hooray, now the rules were clear.
Until 23 February...
The OSR decided to revamp its website. All good fun, but it decided in the process to rewrite the rules on family law transfers. Here's how it changed:
- the previous rulings applied until 23 February, 2009. Here is the old ruling that applies to de facto couples, and here is the one that applies to married couples.
- the view about the OSR for the period from 24 February to 3 March 2009 is not known. There is no ruling that applies to that period.
- From 4 March a new approach applies. It is not on the public rulings page of the website.
- Unhelpfully, the new approach is almost impossible to find. Last week, I went to the OSR website, looking for the ruling. I tried to find out what had happened to the old rulings, and whether a new ruling applied. I think that I am reasonably adept with the web, but I was completely lost. Admitting my inadequacies was easy- I then gave the job to a fellow staff member, who striking the same problem, phoned the OSR for help, which was then able to point to the elusive pages.
- Now, instead of lodging many (but not all) documents for family law transfers with the OSR for stamping, solicitors' firms will have to register and self-assess.
- section 90 of the Family Law Act- transfers pursuant to orders under that Act- click here for flowchart
- section 90L of the Family Law Act- transfers pursuant to binding financial agreements under that Act- click here for flowchart
- section 422 of the Property Law Act - transfers pursuant to recognised agreements only under that Act, and then only if the parties cohabited for greater than 2 years- click here for flowchart
As far as I can see, the following transfers need to be sent to the OSR for assessment. There is every possibility that the the OSR may send them back saying that they ought to be self-assessed:
- transfers pursuant to court order under s.422 of the Property Law Act. For the life of me I cannot understand why the OSR is saying that transfers pursuant to orders under the Family Law Act are self-assessed, but those under the Property Law Act are not.
- transfers pursuant to interstate orders or agreements for de facto couples covering property in Queensland- the OSR is seeking that these be sent to it for assessment. Duty or exemption from duty may already apply.
- even if the parties enter into a recognised agreement under the Property Law Act, the OSR has its own criteria- self-assessment does not apply if they have lived together for less than 2 years. Presumably, the OSR takes the view that if parties live together for less than 2 years, then duty may apply. This is despite the Property Law Act stating that they can live together for 2 years, or have a child together, or have had substantial contributions (which can include non-financial contributions). It begs the question - whether it is preferable for de facto partners who have lived together for less than 2 years to obtain an order from the Supreme Court instead of a recognised agreement- but then self-assessment does not apply!
- if the parties are in a de facto relationship and split up from 1 March, or opt in to the Family Law Act, unbelievably the OSR has not included these couples in the self-assessment model if they enter into a de facto binding financial agreement under that Act- which means they need to be assessed by the OSR, despite section 90WA of the Family Law Act (which says that they are exempt). Section 90WA was not a state secret- Queensland had to pass enabling legislation last year so that the de facto reforms to the Family Law Act, including s.90WA could take effect. Given that the same rules as to eligibility of de facto relationships apply under the Family Law Act as if they were under the Property Law Act ie 2 years OR substantial contributions OR they have a child, the OSR will no doubt scrutinise these agreements carefully to see if the parties have lived together for 2 years. However, if a de facto couple obtains orders under the Family Law Act, they are exempt- and self-assessment applies!
The good news
Yes, there is some. Self-assessment transactions can occur almost instantly, not having to wait 48 hours as was required through the OSR. The 48 hour turnaround compares with NSW which is 24 hours.