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Commencement of the Conveyancing (Sale of Land) Regulation 2022: No Cooling Off Period for a Residential Property Sale Made in Consequence of a Put Option.

In September 2021, Holman Webb published an article highlighting the decision of His Honour Justice Darke in the matter of BP7 Pty Limited v Gavancorp Pty Limited [2021] NSWSC 265Put and Call Option Agreements in Residential Property Transactions.

There has now been a legislative response to this decision.

The Conveyancing (Sale of Land) Regulation 2022 commenced on 1 September 2022.

Regulation 17(3) of the 2022 Regulation provides that “section 66S of the Act does not apply to a contract made in consequence of the exercise of an option to compel the purchase of land”.

This effect of this amendment is that there is no cooling off period for the sale of residential property made in consequence of a Put Option.

Key Stamp Duty Changes for Grant of a Put Option and/or Call Option Have Commenced

Revenue NSW has announced the following:

“From 19 May 2022, section 8(1)(b)(ix) of the Duties Act 1997 introduced duty on certain transactions that result in a change in beneficial ownership.

A put option and/or call option granted over dutiable property in NSW (such as over land or an interest in land) is a ‘change in beneficial ownership’. This means that duty is payable on any grant fee paid for a put and/or call option entered into from this date."

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