Buying a property is a significant commitment, and the name of the purchaser on the Contract of Sale is an important part of the transaction.
But what happens if you sign a Contract of Sale and later decide that someone else should take the property?
In some circumstances, a buyer may be able to nominate another person or entity to receive the property at settlement.
This is commonly referred to as a nomination.
However, nomination is not simply a matter of changing the purchaser’s name on the contract. The contract, the circumstances of the nomination and Victorian duty requirements all need to be considered carefully.
This article explains what a nomination is and what buyers should know before making one.
What is a nomination in Victoria?
A nomination generally occurs when the purchaser named in the Contract of Sale nominates another person or entity to receive the property at settlement.
For example, a buyer may enter into a contract in their own name and later decide that the property should be transferred to a company, family member or another eligible purchaser.
The State Revenue Office recognises nomination as one way a subsequent purchaser may obtain a right to have the property transferred to them at completion.
The original purchaser should not assume that nomination is simply an administrative change. There can be contractual, settlement and duty consequences depending on the circumstances.
Why might a buyer nominate another purchaser?
There can be different reasons why a buyer may want to nominate another person or entity.
For example:
- The buyer decides to purchase through a company.
- The buyer wants a spouse or family member to take the property.
- The buyer’s circumstances have changed after signing.
- The buyer originally intended to purchase personally but later decides another ownership structure is more appropriate.
- The buyer is purchasing with another person and wants the ownership arrangements considered before settlement.
- The buyer has obtained professional advice and needs the property transferred to a different purchaser.
The reason for the nomination can be important when considering the contractual and duty consequences.
Can I change the purchaser after signing the Contract of Sale?
It may be possible to nominate another purchaser after signing, but you should not assume that you can simply change the name on the contract.
A Contract of Sale is a legally binding document once the relevant parties have signed it. Consumer Affairs Victoria explains that, in a private sale, the property is sold when the buyer and seller have signed the contract.
If you want another person or entity to take the property, the nomination needs to be dealt with properly.
The contract should be reviewed and the appropriate nomination documentation prepared.
You should also consider any Victorian stamp duty implications before proceeding.
When should I make a nomination?
There is no single answer that applies to every transaction.
The timing of a nomination can depend on:
- The terms of the Contract of Sale
- The circumstances of the purchaser
- The identity of the proposed nominee
- The purchase structure
- Any additional consideration
- Whether land development has occurred
- Settlement requirements
- Victorian duty requirements
For this reason, if you think you may need to nominate another purchaser, it is better to raise the issue with your conveyancer as early as possible.
Do not wait until the day of settlement to raise a nomination if you already know that the purchaser may need to change.
Does the seller need to agree to the nomination?
This depends on the terms of the Contract of Sale and the circumstances of the transaction.
A buyer should not assume that a nomination automatically changes the seller’s contractual position or removes the need to comply with the contract.
The proposed nomination should be reviewed against the contract before the buyer takes action.
If the contract contains specific requirements relating to nomination, those requirements need to be followed.
Who can I nominate?
The proposed nominee can depend on the circumstances of the transaction and the applicable requirements.
For example, a buyer may consider nominating:
- A spouse or domestic partner
- Another family member
- Another individual
- A company
- Another entity, where permitted and appropriate
The State Revenue Office has specific guidance for some nominations involving relatives, and different evidence and duty requirements can apply depending on the transaction.
If you are considering nominating a company or trust, it is particularly important to obtain appropriate advice before proceeding because the ownership structure and duty consequences may need to be considered.
Can I nominate my spouse or family member?
A nomination to a spouse, domestic partner or other relative may be possible, but it should not be treated as automatically duty-free.
The State Revenue Office has specific provisions dealing with certain nominations between relatives. The requirements include conditions about the purchasers and transferees and the nature of the transaction.
The exact duty treatment depends on the circumstances.
If you are considering nominating a family member, speak with your conveyancer and, where necessary, obtain appropriate duty or legal advice before completing the nomination.
Does nomination affect stamp duty?
It can.
This is one of the most important reasons buyers should obtain advice before making a nomination.
The Victorian State Revenue Office explains that the sub-sale provisions can apply to certain transactions where a subsequent purchaser obtains a right to have the property transferred to them, including through a nomination.
However, a nomination does not automatically mean that additional duty will apply.
The SRO states that the sub-sale provisions can apply where, for example, additional consideration is involved or land development occurs in the relevant period.
The duty position therefore needs to be considered based on the actual transaction.
What is additional consideration?
Additional consideration can be relevant to the Victorian duty treatment of a nomination.
For example, the SRO’s guidance considers whether the subsequent purchaser or an associate gives or agrees to give additional consideration to obtain the transfer right.
This is one reason why buyers should not assume that a nomination between related parties is automatically treated in the same way as every other nomination.
If money or other consideration is being paid in connection with the nomination, obtain advice before proceeding.
What if I have already paid the deposit?
You may still be able to nominate another purchaser after paying the deposit, depending on the circumstances.
However, paying the deposit does not mean that you can simply change the purchaser’s name without dealing with the contractual and settlement requirements.
The nomination should be considered in the context of:
- The original Contract of Sale
- The deposit already paid
- The proposed nominee
- Any additional consideration
- Duty requirements
- Settlement arrangements
If you have already signed the contract and paid the deposit, contact your conveyancer as soon as you decide that another purchaser may need to take the property.
What happens to the original purchaser?
The original purchaser should not assume that making a nomination automatically means they have no further obligations under the transaction.
The effect of the nomination depends on the contractual arrangements and documents involved.
This is particularly important if there are outstanding obligations before settlement.
Your conveyancer can review the transaction and explain what needs to be done to properly document the nomination and prepare for settlement.
What happens at settlement?
If the nomination has been properly dealt with and the relevant requirements have been satisfied, the property may be transferred to the nominated purchaser at settlement.
The settlement process will need to reflect the correct purchaser and transfer arrangements.
The relevant parties may include:
- The original purchaser
- The nominated purchaser
- The seller
- The seller’s conveyancer or solicitor
- The buyer’s conveyancer or solicitor
- The lender, if applicable
- The State Revenue Office, where relevant
The SRO’s current guidance indicates that nomination information and supporting documents may form part of the evidence required for duty assessment and transaction processing.
What if the nominated purchaser is a company or trust?
This needs particular care.
If you originally signed the contract personally but later want a company or trust to take the property, do not assume that you can simply substitute the company or trust before settlement.
The proposed ownership structure can affect:
- Stamp duty
- Financing
- Settlement documents
- Identification requirements
- The contract
- The transfer of land
The SRO’s current Digital Duties Form guidance specifically requires information about the transferee, including company ABN/ACN where applicable, and information about trusts and relationships in relevant transactions.
If you are considering purchasing through a company or trust, it is preferable to obtain appropriate advice before signing the Contract of Sale.
What if I change my mind after signing?
A nomination should not be used simply because a buyer changes their mind about who should own the property without first checking the contract and the consequences.
Once the Contract of Sale has been signed, the transaction is generally binding, subject to the contract and any applicable rights.
Consumer Affairs Victoria confirms that the Contract of Sale contains important information including the buyer’s name, seller’s name, purchase price, deposit, settlement details and special conditions.
If your circumstances have changed, speak with your conveyancer before taking any action.
Can I nominate someone before settlement?
A nomination is generally dealt with before settlement so that the correct purchaser and transfer arrangements can be prepared.
The exact timing and documentation will depend on the transaction.
The earlier you tell your conveyancer, the more time there is to:
- Review the contract
- Check the proposed nomination
- Prepare the necessary documents
- Consider duty requirements
- Confirm identification requirements
- Coordinate settlement
- Address any issues before settlement day
What are the risks of waiting until settlement?
Waiting until the last minute can create unnecessary problems.
For example, there may be additional information or documents required for the nominated purchaser.
There may also be duty, lender, identification or settlement issues that need to be addressed before settlement.
A nomination can also have tax or duty implications in certain circumstances.
The SRO’s current guidance specifically recognises that nomination can form part of a transaction involving sub-sale provisions and that additional consideration or land development can affect the duty treatment.
If you are considering a nomination, tell your conveyancer as soon as possible.
What should I do if I want to nominate another purchaser?
If you have already signed a Contract of Sale and want someone else to take the property, you should:
- Contact your conveyancer as soon as possible.
- Provide a copy of the signed Contract of Sale.
- Explain why you want to nominate another purchaser.
- Provide the full details of the proposed nominee.
- Tell your conveyancer whether the nominee will be an individual, company or trust.
- Explain whether any money or other consideration is involved.
- Provide any documents requested by your conveyancer.
- Allow enough time for the nomination and settlement arrangements to be prepared.
- Obtain appropriate advice about any stamp duty or tax implications where required.
- Do not assume that the purchaser’s name can simply be changed on the contract.
What should I do before signing if I think I may want to nominate someone?
This is an important point for buyers.
If you already know that you may want the property transferred to another person or entity, raise the issue before signing the Contract of Sale.
For example, if you are considering:
- Buying personally but later transferring to a company
- Buying with a spouse
- Buying through a family structure
- Buying through a trust
- Having another person take the property at settlement
you should discuss the proposed structure with the appropriate professional before committing to the contract.
A contract review before signing can help you understand the purchaser details and other contractual terms before you become legally committed.
Common mistakes buyers make with nominations
Assuming nomination is just changing a name
A nomination can have contractual and duty implications. It should be properly documented rather than treated as a simple name change.
Waiting until settlement
Leaving the issue until the last minute can make settlement more difficult.
Assuming family nominations are automatically duty-free
Special rules can apply to nominations between relatives, but the circumstances and requirements need to be considered.
Signing personally when you already know another entity should purchase
If you know before signing that a company, trust or another person should ultimately acquire the property, obtain appropriate advice before signing rather than assuming the purchaser can easily be changed later.
Assuming there are no tax or duty consequences
The Victorian duty treatment depends on the circumstances. Additional consideration and land development can be relevant to the sub-sale provisions.
How can a conveyancer help with a nomination?
A conveyancer can assist with the conveyancing aspects of a nomination by reviewing the Contract of Sale, considering the proposed purchaser arrangements and coordinating the documentation required for settlement.
At Prox Conveyancing, we assist buyers with Victorian property transactions and can help coordinate the conveyancing requirements when circumstances change after a contract has been signed.
If you are considering nominating another purchaser, it is best to contact your conveyancer early rather than waiting until settlement.
Frequently Asked Questions
What does nomination mean in property?
A nomination generally occurs when the purchaser named in a Contract of Sale nominates another person or entity to receive the property at settlement.
Can I nominate someone after signing a Contract of Sale in Victoria?
It may be possible, depending on the contract and circumstances. You should have the transaction reviewed before making the nomination.
Can I nominate my spouse?
A nomination to a spouse may be possible, but the applicable Victorian duty requirements need to be considered.
Can I nominate a family member?
A family member may be able to be nominated depending on the circumstances. Specific duty rules can apply to nominations between relatives.
Can I nominate a company?
It may be possible in some circumstances, but the contract, proposed ownership structure, duty and settlement requirements should be considered before proceeding.
Does nomination automatically mean I have to pay stamp duty again?
Not necessarily. The duty treatment depends on the circumstances. The Victorian State Revenue Office’s sub-sale provisions can apply where particular conditions are met, including additional consideration or land development.
What if I have already paid the deposit?
You should contact your conveyancer promptly. Paying the deposit does not necessarily prevent a nomination, but the contract and proposed nomination need to be considered.
When should I tell my conveyancer about a nomination?
As soon as you know that another purchaser may need to take the property. Early notice gives your conveyancer more time to review the contract and prepare the necessary settlement arrangements.
Can I change the purchaser’s name myself?
You should not simply alter the signed Contract of Sale yourself. A nomination should be properly documented and dealt with in accordance with the contract and applicable requirements.
Final Thoughts
A nomination can be useful when a buyer needs another person or entity to receive the property after a Contract of Sale has been signed.
However, it is not simply a matter of changing the purchaser’s name.
The contract, proposed nominee, timing, settlement arrangements and Victorian duty requirements all need to be considered.
If you think you may need to nominate another purchaser, speak with your conveyancer as early as possible.
The earlier the issue is identified, the more time there is to deal with the documentation and any potential issues before settlement.
About the Author
Meet Sally
Sally Kwok is a Licensed Conveyancer and the Director of Prox Conveyancing. With more than 16 years of experience in the conveyancing industry, she is committed to helping buyers and sellers navigate Victorian property transactions with confidence. Sally is passionate about providing clear communication, practical guidance and personalised service throughout every stage of the conveyancing process.
👉 Learn more about Sally on our About page.
About Prox Conveyancing
Prox Conveyancing is a Victorian conveyancing practice providing professional conveyancing services for residential property transactions across Victoria. We assist buyers, sellers, investors and families with a wide range of conveyancing matters, delivering personalised service, transparent communication and professional support from contract through to settlement.
👉 Learn more about Prox Conveyancing on our About page.
This article provides general information only and is not legal advice. Every property transaction is unique, and the information above may not apply to your particular circumstances. If you require advice about your specific situation, please contact a qualified legal professional or licensed conveyancer.