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Similar property values and a small cash adjustment can make a permanent home exchange seem straightforward. Before committing, gather the records for both homes.
The short answer: A permanent swap of separately owned Victorian homes involves a transfer of each property. The documents and evidence of value need to cover both homes, even when little or no cash changes hands.
Start with a separate record for each home
Identify both properties and the ownership change intended for each. This guide covers exchanges where the properties are not already in joint or common ownership.
For your first discussion with a conveyancer, organise the existing paperwork by property address. Include any agreement you've already made about the exchange and note what remains undecided, including any proposed cash adjustment. Keeping the records separate helps identify gaps in either property's documents.
Ask which contracts and disclosure documents your arrangement needs. Where a sale contract is used, the seller must give the buyer a Section 32 statement signed by the seller before the buyer signs the contract. The statement contains prescribed property information, including title matters and outgoings such as rates. A conveyancer can prepare or review it and the sale contract.
Gather the exchange and value evidence
For each property, the State Revenue Office (SRO) lists any contract of sale or agreement between the parties, a Digital Duties Form, evidence of value and copies of the certificate of title. The Digital Duties Form collects contract and transaction details needed to assess duty.
The SRO's exchange guidance specifies two alternatives for evidence of value:
a letter of appraisal from a licensed real estate agent together with a copy of the rate notice; or
a valuation from a certified practising valuer who is a member of the Australian Property Institute, or from a member of the Real Estate Institute of Victoria with sworn valuer accreditation.
Keep the appraisal and rate notice together if using the first route. The owners agreeing on a figure doesn't supply the evidence listed by the SRO.
For transactions between related parties, including relatives, the SRO requires the declared market value to be supported by an independent valuation. Before ordering evidence for a family exchange, ask your conveyancer to confirm what the actual transaction needs.
Gather the documents you already hold and identify anything missing. Your conveyancer can explain the duty forms and arrange the conveyancing documents.
A cash adjustment is only part of the exchange
The home given in exchange is part of what is paid for the home received. The SRO expressly includes an exchange of property among the ways a property's price can be paid.
For this exchange category, the SRO says each transfer is dutiable on the full value of the property transferred. A balancing cash payment should not be treated as the whole property value.
Suppose two owners agree to swap homes without a cash adjustment. They still give value by transferring their homes, and both transfers need their own property and value records.
The final duty assessment still depends on the actual transaction. Have the actual values, transaction details and any applicable relief checked before relying on a total cost.
Discuss timing before agreeing a date
The SRO directs these exchanges to be lodged as complex transactions 30 days before settlement. Raise the proposed date with your conveyancer early enough for the exchange duty submission to be arranged.
This is a lodgement instruction, not a guarantee that assessment will be completed within 30 days. Gathering the agreements and value evidence early helps your conveyancer consider that instruction when discussing the timetable.
If a date is already agreed and documents are incomplete, send the existing agreement and a list of what is missing promptly. The next steps depend on the actual paperwork and timing.
About the Pearson Chambers Conveyancing team
Pearson Chambers Conveyancing provides residential conveyancing services for purchases, sales and title transfers in Melbourne and Victoria. We can prepare and review sale documents and explain the conveyancing steps relevant to your proposed exchange.
Sources we consulted
Talk through the proposed ownership exchange
Contact Pearson Chambers Conveyancing to discuss the conveyancing and title-transfer steps for your proposed home exchange. Have both property addresses and any existing agreement ready. Email contact@pearsonchambers.com.au.
General information only, current as at the date of publication. Victorian conveyancing rules and legislation change frequently. Please contact the Pearson Chambers Conveyancing team for advice on your specific contract.