A common assumption trips up more families than almost anything else in this area: that because no money is changing hands, transferring a property to a family member won’t attract stamp duty. In Victoria, that’s usually wrong. Duty is assessed on the property’s market value regardless of whether you sell it, gift it, or transfer it for a token amount — and only a handful of narrow, specific exemptions exist outside that rule.
This guide sets out who genuinely qualifies for an exemption, what happens when no exemption applies, and the legal steps involved in transferring property within a family in Victoria. If you’re ready to start the process, our property transfer service handles family transfers across Dandenong and Greater Melbourne from start to finish.
The Default Rule: Duty Applies, Even on a Gift
The State Revenue Office assesses land transfer duty on the greater of the market value or the price paid. If a parent transfers a $900,000 home to their child for $1, or for nothing at all, duty is still calculated as though the property sold for $900,000. The absence of a sale price doesn’t reduce the dutiable value — it just means the SRO will require evidence of market value, typically a formal valuation or agent appraisal, to assess the duty owed.
This catches out more families than any other aspect of property transfers. Gifting, “selling” for a nominal amount, or transferring as part of informal family arrangements are all treated the same way for duty purposes as an arm’s-length sale, unless a specific exemption applies.
The Exemptions That Actually Exist
Genuine duty exemptions for family transfers in Victoria are limited to a small number of defined categories.
Spouse and Domestic Partner Transfers
A transfer between spouses or domestic partners can be exempt from duty, but only where all of the following apply:
- The property is being transferred for no consideration (a genuine gift, not a sale)
- The property is, or will become, a principal place of residence — at least one party must move in within 12 months of the transfer and live there continuously for at least 12 months
- No other person receives an interest in the property
This is narrower than many people assume. It applies to a couple’s home, transferred between them with nothing paid — not to an investment property, and not to a transfer where one party is buying out the other’s share for money (that’s typically treated as a dutiable sale of that share).
Relationship Breakdown Transfers
A separate exemption applies to transfers made solely because of the breakdown of a marriage or domestic relationship — for example, as part of a property settlement. This requires both the transferor and transferee to be parties to the relationship, a maximum of two transferees, and that both are natural persons rather than a company or trust. A transfer of any remaining interest to a third party outside the relationship doesn’t qualify.
Family Farm Exemption
Transfers of primary production land between family members — parents and children, siblings, and several other defined relationships — may be exempt, but only where the land genuinely qualifies as primary production land and the transfer isn’t part of a tax avoidance arrangement. This exemption is specific to farming land and does not extend to a family home or residential investment property.
What Doesn't Qualify
This is the part that catches most families out: gifting an ordinary residential property to children, siblings, or other relatives outside these specific categories generally does not qualify for any duty exemption. A parent transferring the family home to an adult child, for example — even as part of estate planning, even for no money — will typically be assessed for duty on the property’s full market value, exactly as if it had been sold.
What This Means in Practice
If your transfer doesn’t fall into one of the exemption categories above, plan for duty to apply at standard rates on the property’s market value. This has a few practical consequences worth factoring in early:
- You’ll need a valuation. The SRO requires evidence of market value to assess duty correctly — typically a valuation from a licensed valuer or a formal agent appraisal, not just a guess at what the property might be worth.
- CGT may also apply. The Australian Taxation Office treats a gifted property as a disposal at market value, which can trigger Capital Gains Tax for the person transferring it — particularly relevant for investment properties or anything that isn’t the transferor’s main residence. This sits alongside, not instead of, stamp duty, and is worth discussing with your accountant before the transfer proceeds.
- Lender consent is required if there’s a mortgage. A lender has a legal interest in the property and must approve any change in ownership. Some will consent with a simple letter; others may require refinancing. This needs to be sorted before settlement, not assumed.
The Legal Steps Involved
- Confirm whether an exemption applies, based on the categories above, and gather the evidence needed to support it (or, if no exemption applies, arrange a valuation for duty purposes).
- Prepare the transfer documentation — a Transfer of Land form, and a Deed of Gift if no money is changing hands (in place of a Contract of Sale).
- Obtain mortgagee consent, if the property is mortgaged, before proceeding further.
- Lodge the Digital Duties Form with the State Revenue Office, claiming any applicable exemption or having duty assessed.
- Settle electronically through PEXA, and lodge the transfer with Land Use Victoria to register the new ownership.
Common Mistakes
Assuming a gift avoids duty. As covered above, this is the single most common and costly misunderstanding in family property transfers.
Not documenting the transfer properly. Without a formal Deed of Gift or equivalent written record, the intent behind a transfer can later be disputed — particularly relevant in estate disputes or family law proceedings down the track.
Proceeding without lender consent. Transferring a mortgaged property without the lender’s approval can put the transfer itself at risk.
Overlooking CGT. Families often focus entirely on stamp duty and don’t realise the person transferring the property may have a separate CGT liability to consider.
Frequently Asked Questions
Can I avoid stamp duty by transferring property to my child for $1?
No. The SRO assesses duty on market value, not the price stated in the transfer, so a nominal sale price doesn’t reduce what’s owed.
Is there a general exemption for transfers between family members?
No. Exemptions are limited to specific categories — spouse/partner transfers of a principal residence, relationship breakdown transfers, and the family farm exemption. An ordinary parent-to-child or sibling-to-sibling transfer of a home generally doesn’t qualify for any of these.
Do I need a valuation?
If no exemption applies, yes — the SRO requires evidence of market value to assess duty, typically from a licensed valuer or a formal agent appraisal.
What if there's still a mortgage on the property?
You’ll need the lender’s consent before the transfer can proceed. Some lenders accept a consent letter; others require the loan to be refinanced as part of the process.
Speak to Our Team Before You Transfer
Family property transfers carry real legal and financial consequences, even when no money changes hands. Getting the exemption position, valuation, and documentation right from the outset avoids costly surprises later. Speak to our team about your specific situation before you proceed.
Sources & References
- State Revenue Office Victoria — Spouse and partner exemption
- State Revenue Office Victoria — Breakdown of marriage and domestic relationships exemption
- State Revenue Office Victoria — Family farm exemption
- Duties Act 2000 (Vic)
This article provides general information about property transfers in Victoria and is not legal, financial, or tax advice. Stamp duty and CGT outcomes depend on individual circumstances. Speak with a qualified conveyancer and your accountant before transferring property to a family member.
