„ F a c t S h e e t „

Conditional Contracts
Under Part II of the Stamp Act 1921

As at 1 July 2004

Introduction
As from 1 July 2004, alternative lodgement and payment periods are available for contracts or
agreements for the sale or conveyance of property which satisfy the definition of an ‘eligible
conditional contract’, as defined under section 6 of the Stamp Act 1921 (‘the Act’). 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 ‘eligible conditional contract’, however, excludes the following:

(a) a put option and a call option that are deemed to be a contract under section 74B;

(b) a contract for the sale of a unit in a unit trust scheme as defined in section 63(1); and

(c) 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:

1. General Conditional Contracts

2. Farming Land Conditional Contracts

3. Off-The-Plan Conditional Contracts

4. Mining Tenement Conditional Contracts

5. Subdivision Conditional Contracts

The different types of eligible conditional contracts can be identified as follows:

1. General Conditional Contracts

A contract in which completion is conditional on the happening of one or more of the following
conditions specified in the contract:

(a) 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;

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 (b) the purchaser obtaining funds or approval to obtain funds to finance the purchase to the
satisfaction of the purchaser;

(c) 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;

(d) 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;

(e) the authorisation of the payment to the purchaser of a first home owner grant under the
First Home Owner Grant Act 2000;

(f) the obtaining by the purchaser of a licence to trade or the grant of a franchise;

(g) the obtaining by the vendor of a commercial property of the renewal of an existing lease of
the property;

(h) 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;

(i) the sale of another property by the purchaser;

(j) the obtaining by the vendor of the registration of a plan of subdivision, or of a strata plan or
survey strata plan;

(k) the obtaining by the purchaser of approval from a regulatory body;

(l) 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;

(m) the issue of a certificate of title (however described) for the property that is the subject of
the contract;

(n) a prescribed event.

Please note that a general conditional contract between related parties is not an eligible
conditional contract and is still required to be lodged within two (2) months after the date
on which it was first executed.

2. Farming Land Conditional Contract

A 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).

3. Off-The-Plan Conditional Contract

A 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.

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4. Mining Tenement Conditional Contract
A 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.

5. Subdivision Conditional Contract

A 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 Contracts

A 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 Contracts
Conditional 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 Contracts

Duty on this type of contract is payable within one (1) month after the date of the assessment
notice.

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Farming Land or Mining Tenement Conditional Contracts
The 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 Contracts

The 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 Contracts

A 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
www.osr.wa.gov.au, is required to be lodged.

Farming Land, Mining Tenement, Off-The-Plan or Subdivision Conditional

Contracts
Where a contract of this type is terminated, its liability to duty is determined under section 20 of the
Act. Accordingly, an Application for Reduction of Stamp Duty if Matter not carried into Effect is to
be lodged. Applications are available at the Office of State Revenue and also on the web site at
www.osr.wa.gov.au.

Penalty and Offence

Penalty tax applies for the late lodgement of documents and late payment of stamp duty.
Section 17BA of the Act provides for a penalty of $5,000 if an offence is committed.
Office Office of State Revenue Telephone (08) 9262 1100
Plaza Level, Mt Newman House 1300 368 364
200 St Georges Terrace (WA country STD callers only –

Office hours PERTH WA 6000 local call charge)

8:00 am – 5:00 pm Monday to Friday Facsimile (08) 9226 0834

Postal E-mail stampduty@dtf.wa.gov.au
Office of State Revenue
Website www.osr.wa.gov.au
GPO Box T1600
PERTH WA 6845

Note: The information contained in this FACT SHEET is issued for guidance purposes only. It is not an exhaustive
explanation of the provisions of the Stamp Act 1921 and reference should be made to the Act for complete details.

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