Recent changes to the Duties Act 1997 have resulted in an expansion of “dutiable transactions” to include “change of beneficial ownership”. The grant of a put and/or call option is now a dutiable transaction and stamp duty is payable on the option fee which is paid by the purchaser in consideration of the landowner granting the option. If the call option fee forms part of the purchase price once the option is exercised and a contract for sale exchanged, the duty paid on the option fee is not credited towards the duty payable on the contract purchase price. Full ad velorum stamp duty is payable on the full purchase price. If the call option is not exercised, a refund of the duty paid on the option fee will not be issued. A genuine security deposit, i.e., an amount equal to 10% of the purchase price and credited as a deposit once contracts have exchanged should not attract duty. Duty is only appliable to “option fees”.
If you are considering selling or purchasing a property and entering into an option please contact our office to obtain advice as to how these duty changes will affect you prior to signing any documents. You can make an appointment with one of our experienced Property Law Solicitors today on 02 4627 3333.
This article was published on 20/09/22 and the information is valid only to the date of publishing. This article should be considered merely general and non-specific on the subject matter and is not and should not be considered or relied on as legal, advice. Meehans Solicitors is not responsible in the event this information is relied upon by the reader in the absence of specific legal advice.