Section 18 of the Duties Act can be utilised in the event that a property is purchased by a party who subsequently realises that it would be more favourable if the property were purchased by a related person. For example, a husband may attend an auction and be the successful bidder. After the auction he signs the contract and the contracts are exchanged. He is committed to the purchase. If the purchaser then gets advice from his accountant that his wife (or another related person) would be a more favourable purchaser, then the transfer of the property can be to the wife notwithstanding the terms of the contract. The additional duty payable is $10.00. In other words, although the husband was the successful bidder, the wife can be the ultimate owner of the property. A related person under the Act includes the spouse or de facto spouse of the purchaser, the parent, child, brother or sister of the purchaser. A list of who is a related person to the purchaser is defined in the dictionary of the Act.
Care must be taken if Section 18 is to be utilised that the related person fits within into the definition of the Act. If the transferee does not, then Revenue NSW will insist on stamp duty being paid by the transferee in addition to the stamp duty being paid by the purchaser.
It follows that whilst this Section can be of assistance, care must be taken. However, the section can be helpful where a person cannot attend an auction or a person would like to secure a property and must exchange contracts without delay to avoid losing the property. In that event, if the ultimate transferee (and therefore owner) of the property is “related person” then Revenue NSW will not impose double duty.