Purchasers looking to develop residential property sites are increasingly entering into put and call option deeds in lieu of conventional sale contracts. Entering an option deed is becoming a more popular option for purchasers due to increased flexibility regarding the time at which land transfer duty (also known as ‘stamp duty') becomes payable.
Put and call option deeds give rise to contractual rights and obligations between the parties who have entered the agreement. In such agreements, the call option confers a future right upon the buyer to oblige the vendor to sell the land whereas the put option confers a future right upon the vendor to oblige the purchaser to purchase the land.
In scenarios involving the sale of land, the agreement usually attaches the sale contract and results in the same outcome as if traditional sale of land contracts had been executed. Stamp duty, however, is not payable until the exchange of contracts. Therefore, entering the option agreement
