Abolition of Duties - 1 July 2016

On 1 July 2016, certain duties are being abolished in New South Wales:

Mortgage Duty

Duty on all mortgages, is abolished from 1 July 2016. Mortgages executed on or after 1 July 2016 will not be liable to duty.

Further advances made on or after 1 July 2016 are also not liable to duty, irrespective of the date of the mortgage.

No duty is payable on a caveat, protecting an interest under an unregistered mortgage executed on or after 1 July 2016

Mortgages do not need to be stamped or marked in respect of any of the above.

For more information, read the Abolition of NSW mortgage duty on 1 July 2016 factsheet.

Business Assets Duty

Abolition of duties on business assets

The following types of property cease to be dutiable property from 1 July 2016:

  1. A business asset, being, at any relevant time:
    1. The goodwill of a business, if the business supplied in NSW, or provided services in NSW, to a customer of the business, or
    2. Intellectual property that has been used or exploited in NSW, or
    3. A statutory licence or permission under a Commonwealth law if the rights under the licence or permission have been exercised in NSW
  2. A statutory licence or permission under a NSW law (for example a taxi licence or water access licence)
  3. A gaming machine entitlement within the meaning of the Gaming Machines Act 2001

Duty is not payable on the value of the above types of property which are included in dutiable transactions entered into on or after 1 July 2016.

Duties to be retained on some business assets

The following types of property remain dutiable property from 1 July 2016:

  1. land and an interest in land (including a leasehold interest and fixtures), and
  2. goods in NSW (subject to exclusions, such as stock-in-trade, listed in section 11(1)(j) of the Duties Act), if the subject of an arrangement that includes a dutiable transaction over other dutiable property, such as land 

Anti-avoidance measures

Abolition does not apply in respect of a transfer or transaction that occurs on or after 1 July 2016 if it:

  1. Replaces a transfer or transaction involving the same business asset, statutory licence or permission, or gaming machine entitlement that occurred before 1 July 2016, or
  2. Is made or entered into pursuant to an option to purchase the business asset, statutory licence or permission, or gaming machine entitlement that was granted before 1 July 2016, or
  3. Was made or entered into pursuant to another arrangement, made before 1 July 2016, the only or main purpose of which was to defer the transfer or transaction until 1 July 2016, or later, so that duty would not be chargeable on the transfer or transaction.

Interim stamped agreements for sale

An agreement to transfer any of the abolished dutiable property first executed before 1 July 2016 which was interim stamped with estimate duty (under section 49 of the Duties Act) will continue to be liable to additional duty even if the date of final purchase price or completion occurs on or after 1 July 2016.

A refund of estimate duty will also be provided in these circumstances if the estimate duty was more than should have been paid at completion.

For more information, read the Abolition of NSW duty on Business assets on 1 July 2016 factsheet.

Marketable Securities (shares and units) Duty abolition

Property that will cease to be dutiable property from 1 July 2016

The following types of property cease to be dutiable property from 1 July 2016:

  1. Shares in a NSW company, and shares in a corporation incorporated outside Australia that are kept on the Australian register kept in NSW
  2. Units in a unit trust scheme, being units:
    1. Registered on a register kept in NSW, or
    2. That are not registered on a register kept in Australia, but in respect of which the manager (or, if there is no manager, the trustee) of the unit trust scheme is a NSW company or is a natural person resident in NSW.

NSW company means:

  1. a company incorporated or taken to be incorporated under the Corporations Act 2001 of the Commonwealth that is taken to be registered in New South Wales for the purposes of that Act, or
  2. any other body corporate that is incorporated under an Act of New South Wales.

For more information, read the Abolition of NSW marketable security duty factsheet.

Commercial fishery shares

Duty on transfers of shares in a share management fishery (within the meaning of the Fisheries Management Act 1994) is abolished on 1 July 2016.

Other transactions not liable to duty from 1 July 2016

  1. Entitlements arising from capital reductions or right alterations under Part 3 of Chapter 2 (sections 124 to 131).
  2. Allotment of shares by direction under Part 5 of Chapter 2 (sections 137A to 144).

Interim stamped agreements for sale

An agreement to transfer any of the abolished dutiable property first executed before 1 July 2016 which was interim stamped with estimate duty (under section 49 of the Duties Act) will continue to be liable to additional duty even if the date of final purchase price or completion occurs on or after 1 July 2016.

A refund of estimate duty will also be provided in these circumstances if the estimate duty was more than should have been paid at completion.

Landholder duty

A landholder is a unit trust scheme, a private company or a listed company that has land holdings in New South Wales with a threshold value of $2,000,000 or more.

Duty on certain acquisitions of shares or units in landholders remains liable to duty under Chapter 4 of the Duties Act 1997.

So whilst marketable security duty is not payable on the share or unit acquisition from 1 July 2016 the acquisition could attract landholder duty.

For more information, read the Landholder Duty factsheet.

Company title dwellings and land use entitlements

A transfer of shares or units in a  company title dwelling or land use entitlement is still liable to duty from 1 July 2016.

Company title dwelling is defined in the dictionary of the Duties Act as a separate dwelling in a building containing more than one separate dwelling situated in NSW owned or leased by a company in which shares issued by the company are owned or leased by a company in which shares issued by the company are owned by persons who, by virtue of the ownership of their shares, have an exclusive right to occupy a part of the building.

Land use entitlement is defined in the dictionary of the Duties Act as an entitlement to occupy land within NSW conferred through an ownership of shares in a company or an ownership of units in a unit trust scheme, or a combination of a shareholding or ownership of units together with a lease or licence.

Duty on transactions involving company title dwellings and land use entitlements are chargeable at the general rate (set out in section 33 of the Act) on the dutiable value of the property transferred.

Last updated: 23 May 2016