Duty, which is commonly known as stamp duty, is levied upon the sale of shares and property to cover the cost of the legal documents and processes of such transactions and is enforced by state governments. As a purchaser or borrower you may be subject to duty for your title transfers as a result of transferring (i.e. buying) real estate, vehicles, business assets and other property. Gifts, insurance policies and home loans can also be subject to duty, and the amount of tax levied is different depending on what state you live in.

Duty must be paid within three months from the date of exchange of contracts. The only concession to this is when you purchase ‘off the plan’ – this is the purchase of land on which a residence is to be erected or developed before completion of the sale or transfer. In this case duty must be paid within three months from the date of completion of the agreement, or the assignment of the whole or any part of the purchaser’s interest under the agreement, or the expiration of 12 months after the date of the agreement, whichever first occurs.

Transfer of dutiable property

‘Dutiable property’ includes land and goodwill. The following transactions are considered to be “dutiable property” and as a result will generally require the payment of “duty.”

•   an agreement for sale or transfer
•   a surrender of an interest in land in NSW
•   a vesting of land by statute law
•   a foreclosure of a mortgage
•   a vesting of dutiable property by or as a consequence of a court order

Dutiable Values

The amount of tax payable varies depending on the value of the dutiable property being transferred. The below table outlines the level of duty charged for each price range:

Not more than $14 000

$1.25 for every $100, or part, of the dutiable value

More than $14 000 but not more than $30 000

$175 plus $1.50 for every $100, or part, by which the dutiable value exceeds $14 000

More than $30 000 but not more than $80 000

$415 plus $1.75 for every $100, or part, by which the dutiable value exceeds $30 000

More than $80 000 but not more than $300 000

$1290 plus $3.50 for every $100, or part, by which the dutiable value exceeds $80 000

More than $300 000 but not more than $1 million

$8990 plus $4.50 for every $100, or part, by which the dutiable value exceeds $300 000

More than $1 million

 

$40 490 plus $5.50 for every $100, or part, by which the dutiable value exceeds $1 million

 

Some other “dutiable property” transactions to be aware of include:

Premium property duty – The rate of duty chargeable on a dutiable transaction in respect of residential land that has a dutiable value exceeding $3 million is: $150 490 plus $7 for every $100, or part, by which the dutiable value exceeds $3 million.

Shares and units – The rate of duty chargeable on the transfer of shares in a NSW company is: 60 cents for every $100 or part of $100. The rate of duty chargeable on the transfer of units in a unit trust scheme is: 60 cents for every $100 or part of $100 being units registered on a register kept in NSW.

Leases – Leases executed on or after 1 January 2008 are not liable to duty unless a ‘premium’ is paid or agreed to be paid in respect of the lease.

Mortgages – If the mortgage secures no amount or if the amount secured by the mortgage is not more than $16 000, the duty is $5 (there is an extra $4 for every $1000 that exceeds the $16 000.)

Motor Vehicle Registration – For a passenger vehicle, the duty is: $1350 plus $5 per $100, or part, of the dutiable value of the motor vehicle in excess of $45 000.

Duplicates or counterparts – A duplicate or counterpart of an instrument chargeable with duty is charged at the duty rate of $10.

Here at The Quinn Group our experienced team of accountants, lawyers and tax agents can assist you with your duty issues. For more information submit an online enquiry or call us on 1300QUINNS (784 667) or on +61 2 9223 9166 to book an appointment.