A house is not a home: when is the stamp duty residence requirement met?

Transfer duty (or “stamp duty”) can be a significant additional cost when purchasing a property. As such, it is important to be aware of when that duty is payable.

Generally, a purchaser must pay duty within 3 months of contracts being exchanged. However, a purchaser of “off the plan” property may be able to delay making payment of duty by up to 12 months from exchange of contracts.[1]

To do so, the following conditions must be met:

1. the purchaser must use and occupy the residence as a “principal place of residence”

2. for a continuous period of at least 6 months

3. with occupation commencing no later than 12 months after completion of the agreement for the sale or transfer.[2]

The _Duties Act_ refers to the above as “the residence requirement”.

**What is a principal place of residence?**

Recently, the NSW Civil and Administrative Tribunal considered what using or occupying a place as a “principal place of residence” means.[3]

In that case, the applicant (Mr Peng) claimed he resided at a Hornsby property for 6 months (and, as such, satisfied the residence requirement). Revenue NSW argued he was actually residing at a Burwood property during the relevant time.

The Tribunal confirmed the following principles are applied, when considering the question of whether someone occupied a property as a “principal place of residence”:

1. The question is considered objectively, with the Tribunal examining the evidence available to them, of those circumstances relating to the actual use and occupation of the property.[4]

For example, relevant evidence might possibly include: evidence of where someone eats or sleeps, of electricity or other utilities being used, or of personal mail or a drivers licence referring to that address.

2. While subjective intention is relevant, the purchaser’s intention alone does not determine the question.[5]

For example, a purchaser simply stating they considered a property their principal place of residence might not be sufficient (especially where other evidence suggests otherwise).

3. Occupation by a purchaser must have a degree of permanence to it (in comparison to occupation that is “transient” or “temporary”).[6]

For example, merely sleeping at a certain residence on occasion, or only residing there briefly, would tend against a Tribunal concluding the property was a principal place of residence.

For Mr Peng, evidence of “rent” from the Hornsby property, as well as regular payments by him in the Burwood area, suggested the Hornsby property was not his principal place of residence. The Tribunal also took into account a Border Force passenger declaration by Mr Peng, which listed the Burwood property as his address.

From this case, the takeaway for an off the plan purchaser is to be aware of what evidence will be relevant, in the event they are ever required to establish that the residence requirement does, in fact, apply to their purchase.

[1] _Duties Act 1997_ (NSW) s 49A.

[2] _Duties Act 1997_ (NSW) ss 49A(1A) and s 49A(1B).

[3] _Peng v Chief Commissioner of State Revenue_ [2022] NSWCATAD 212 (‘Peng’).

[4] _Peng_, at [38].

[5] _Peng_, at [44].

[6] _Peng_, at [46].

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