00/font>Fact Sheet00/font>
Conditional Contracts
Under Part II of the Stamp Act 1921
As at 1 July 2004
IntroductionAs from 1 July 2004, alternative lodgement and payment periods are available for contracts or agreements for the sale of property which satisfy the definition of an 00ligible conditional contract00/b>, as defined under section 6 of the Stamp Act 1921 (00he Act00. A conditional contract may be considered to be an eligible conditional contract, if the completion of the contract is conditional upon the happening of an event over which the parties (or related persons to the parties) to the contract do not have any control, except to the extent that they are required under the contract to use their best endeavours to secure the happening of the event.
The definition of an 00ligible conditional contract00 however, excludes the following:
a put option and a call option that are deemed to be a contract under section 74B; a contract for the sale of a unit in a unit trust scheme as defined in section 63(1); and a contract that is subject to a condition which, in the opinion of the Commissioner of State Revenue, constitutes an arrangement or part of an arrangement to avoid or defer the payment of duty.There are five defined classes of eligible conditional contracts:
General Conditional Contracts Farming Land Conditional Contracts Off-The-Plan Conditional Contracts Mining Tenement Conditional Contracts Subdivision Conditional ContractsThe different types of eligible conditional contracts can be identified as follows:
General Conditional ContractsA contract in which completion is conditional on the happening of one or more of the following conditions specified in the contract:
the purchaser obtaining from the Australian Taxation Office a satisfactory private taxation ruling by the Commissioner of Taxation of the Commonwealth, as to the consequences of the contract with respect to taxation under a law of the Commonwealth; the purchaser obtaining funds or approval to obtain funds to finance the purchase to the satisfaction of the purchaser; the purchaser obtaining a satisfactory building inspection, geotechnical or environmental report from a third party in relation to the property to be sold or conveyed under the contract; the obtaining by a vendor of the consent of the Minister responsible for administering the Land Administration Act 1997 to transfer a lease of leasehold land to a purchaser; the authorisation of the payment to the purchaser of a first home owner grant under the First Home Owner Grant Act 2000; the obtaining by the purchaser of a licence to trade or the grant of a franchise; the obtaining by the vendor of a commercial property of the renewal of an existing lease of the property; the obtaining from the landlord of a leasehold business by the vendor of the business of a new lease, or of an assignment of the lease to a purchaser; the sale of another property by the purchaser; the obtaining by the vendor of the registration of a plan of subdivision, or of a strata plan or survey strata plan; the obtaining by the purchaser of approval from a regulatory body; the results of the making of due diligence inquiries by the purchaser where the results are to be measured against objective criteria set out in the contract; the issue of a certificate of title (however described) for the property that is the subject of the contract; a prescribed event.Please note that a conditional contract between related parties is still required to be lodged within two (2) months after the date on which it was first executed.
Farming Land Conditional ContractA general conditional contract that is:
solely or principally for the sale of farming land as defined in section 75D(1) of the Act; or a primary produce contract that is solely or principally for the sale of farming land and the completion of the contract is affected by or subject to a primary production activity as defined in section 75D(1). Off-The-Plan Conditional ContractA general conditional contract for the sale of a strata lot and the construction of a building on the strata lot for commercial, residential or mixed-use purposes.
Mining Tenement Conditional ContractA general conditional contract for the sale of a mining tenement, right under a mining tenement, right of occupancy under the Mining Act 1978 or a tenement, right or interest that is similar and held under a law elsewhere.
Subdivision Conditional ContractA general conditional contract for the sale of land, the completion of which is conditional on the obtaining by the purchaser of approval from the relevant authorities to subdivide the land or part of the land.
A contract that falls within a category described in 2 to 5 above has specific lodgement and payment obligations as set out below. The lodgement and payment obligations that apply to general conditional contracts do not apply to these specific categories of contracts.
Please note that a related party conditional contract will be eligible for extended payment periods where the contract falls within a category described in 2 to 5 above.
Lodgement of certain conditional contracts General Conditional ContractsA general conditional contract that becomes unconditional within one month after the date of first execution must be lodged with the Office of State Revenue within two (2) months after the date on which it was first executed.
A general conditional contract that becomes unconditional after one (1) month of the date of first execution must be lodged within one (1) month after the date on which the contract becomes unconditional or within twelve (12) months after the date on which the contract was first executed, whichever is earlier. The date that the contract becomes unconditional must be noted on the Stamp Duty Document Lodgement and Assessment Form.
A general conditional contract that does not become unconditional or is not terminated on relevant grounds within twelve (12) months after the date on which the contract was first executed is required to be lodged with the Office of State Revenue within twelve (12) months after the date on which the contract was first executed.
Farming Land, Mining Tenement, Off-The-Plan and Subdivision Conditional ContractsConditional contracts falling within these categories are required to be lodged with the Office of State Revenue within two (2) months after the date on which the instrument was first executed. To obtain the extended payment period, the type of conditional contract must be noted on the Stamp Duty Document Lodgement and Assessment Form.
Time for payment of certain conditional contracts General Conditional ContractsDuty on this type of contract is payable within one (1) month after the date of the assessment notice.
Farming Land or Mining Tenement Conditional ContractsThe duty on a farming land or a mining tenement conditional contract is payable within twelve (12) months after the date on which the contract was first executed or one (1) month after the date of the assessment notice, whichever is the later.
Off-the-Plan or Subdivision Conditional ContractsThe duty on an off-the-plan or subdivision conditional contract is payable within two (2) years after the date on which the contract was first executed or one (1) month after the date of the assessment notice, whichever is later.
Termination of conditional contracts General Conditional ContractsA general conditional contract which is not carried into effect before it is required to be lodged, is not required to be lodged with the Office of State Revenue and duty is not chargeable, provided that the reason for the agreement not being carried into effect is that the contract has ended because of a non fulfilment of a condition to it. This does not include a situation where the parties have agreed to cancel the contract and a benefit has been provided under the contract.
Where a general conditional contract has been lodged with the Office of State Revenue and is not being carried into effect, an application for Reduction of Stamp Duty if Matter not carried into Effect, which is available at the Office of State Revenue and also on the web site at
