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You will be aware that under Section 275 of the Duties Act (NSW), schools [organisations whose resources are used for the promotion of education in Australia] do not have to pay transfer duty (previously “stamp duty”) when they buy a property. To get the exemption, the school must make an initial application to Revenue NSW for confirmation of its entitlement to the exemption. The exemption lasts for three years. After you exchange a Contract to buy a property, you need to send to Revenue NSW the Contract and various documents confirming that the objects of the school have not changed, and request exemption from duty for the particular property.

At present, the process can take over six weeks but most Contracts have a six-week settlement period. A delay in settlement by the school normally attracts interest on the outstanding purchase price. In the past, it was often possible to settle the purchase and then make the application to Revenue NSW. However, with electronic settlements the duty position has to be resolved at the point of settlement. Unless you can be confident that you will be able to settle in the required time period, you will have to pay the duty before settlement and afterwards apply for a refund. Having an incoming lender can further complicate matters.

If you are considering purchasing a property, you should ensure that you have an exemption letter from Revenue NSW that is less than three years old and have the supporting documents ready to lodge with Revenue NSW with the Contract immediately after exchange.

For assistance in this area and with all property matters, please contact our accredited property specialist, w%B8%CA%BD%D6%BCc%C7%B3%AC%AC%BA%98%AE%A4%D7%84.