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NSW Stamp Duty Amendments
Posted: 25/11/2009
Purchasers and trustees of property in New South Wales should take note of the State Revenue Legislation Further Amendment Bill (No 2) 2009 (NSW) (“Amending Laws”). Passed on 11 November 2009, and set to take effect on 1 December 2009, the Amending Laws make significant changes to the calculation of stamp duty on acquisitions of interests in companies and unit trusts which own land, in New South Wales, with a value of $2 million or more (“Landholder”).
The key changes imposed by the Amending Laws include:
- an agreement for sale of an interest in a Landholder is taken to be completed 12 months from the date of the agreement, unless it is otherwise completed before that date. For example, purchasers who purchase off the plan where settlement may not take place for a period significantly in excess of 12 months will nonetheless be required to pay stamp duty on the purchase 12 months from the date of the agreement. This contrasts with the current position where stamp duty on a land transaction in NSW is payable within 3 months of the settlement date of the transaction.
- if a person acquires an interest in a Landholder as the trustee for two different trusts, the liability to pay duty will be calculated as if the interests were acquired by two separate persons and will not be aggregated.
- where a person acquires an interest in a Landholder as a trustee for another person as the beneficial owner of the interest, the person liable to pay duty will be the beneficial owner, not the trustee.
- creditors of Landholders may have an interest in the Landholder even where that person is not entitled to an interest in the winding up of a Landholder but is entitled to other payments from the Landholder and will be required to withstand tests designed to distinguish between debt (which are not dutiable) and equity interests (which will be dutiable).
If you are looking to purchase land in NSW from 1 December 2009, it is important to seek legal advice in respect of how the changes described above may affect you.
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