Stamp duty implications of call option agreements in NSW

Call Option Agreements have become increasingly popular amongst property investors and developers in New South Wales, providing an alternative method of transacting to the traditional contract for sale. 

In essence, call option agreements provide a buyer (known as the grantee) with the right to acquire a property at a future point in time from the seller (known as the grantor) for an agreed price. This right usually involves the grantee paying the grantor a fee, known as a call option fee. Depending on agreed terms, call option agreements can provide grantees with an extended period of time to arrange their finances and carry out due diligence, and often involve smaller upfront financial obligations. If the grantee does not exercise its option to acquire the property, the call option fee is generally forfeited to the grantor.