Duties Act 1997
These amendments commence on 1 July 2010 and include:
- NSW Home Builders Bonus
- Transactions over property not yet in existence
- Special disability trusts exemption
- Transfers to new or additional trustees
- Transfers to self managed superannuation funds
- First Home Plus concession
- Landholder duty
- Mortgage duty
- Transfers between custodians
- Transfers in connection with persons changing superannuation funds
- Fraudulent or void transactions
- Transfers of primary production land
- Charitable and benevolent bodies
- Mortgage-backed and asset-backed securities
Transactions over property not yet in existence
An amendment to section 12 clarifies that a transfer, or other transaction, in respect of dutiable property, is liable for duty even if the dutiable property is not in existence at the time that the transfer is taken to have occurred.
Special disability trusts exemption
The Commonwealth Social Security Act 1991 allows for special disability trusts to be established by families who wish to provide for the care and accommodation needs of a family member with a severe disability.
New section 65 (22) provides exemptions:
from the $500 duty on an instrument establishing a special disability trust, within the meaning in the Social Security Act 1991,
from ad valorem duty on a declaration of trust over dutiable property to be held by a special disability trust, and
from ad valorem duty on a transfer of dutiable property to a special disability trust by way of gift.
Section 54(2A) provides for duty of $50 to be payable on a transfer of dutiable property to a trustee of a special disability trust, as a consequence of the retirement of a trustee or the appointment of a new trustee, subject to certain requirements.
Transfers to new or additional trustees
Amendments to section 54 refine the circumstances in which certain transactions that are made as a consequence of the retirement of a trustee and the appointment of a new trustee are chargeable with nominal duty. Under the pre-amendment provisions, $50 is charged in such circumstances if the dutiable property concerned is transferred to a special trustee. The amendment limits the definition of special trustee, so that the concession applies only to a licensed trustee acting in its capacity as trustee or administrator of a deceased estate, or the trustee of a complying superannuation fund within the meaning of section 42 of the Superannuation Industry (Supervision) Act 1993, acting in its capacity as trustee of that fund. New section 54(2A) includes new requirements that must be met before a transfer of dutiable property to a licensed trustee company that is not acting in its capacity as trustee or administrator of a deceased estate will be chargeable with nominal duty.
Transfers to new trustees who are not ‘special trustees’ will continue to be eligible for the duty concession subject to the Chief Commissioner being satisfied that the new trustee is not and cannot become a beneficiary of the trust.
Transfers to self managed superannuation funds
New section 62A provides that duty of $50 is payable on a transfer or an agreement to transfer dutiable property from a person to the trustee of a self managed superannuation fund, if:
the transferor is the only member of the superannuation fund or the property is to be held by the trustee of the superannuation fund solely for the benefit of the transferor, and
the property is to be used solely for the purpose of providing a retirement benefit to the transferor.
First Home Plus concession
Amendments to section 71(6) ensure that a person who owns property as an executor of an estate is not prevented from being eligible under the scheme if he or she decides to purchase the property.
New section 74A makes provision for the application of the First Home Plus scheme to multiple occupancy contracts. The object of the amendment is to ensure that the cap on the value of the dutiable transaction applies to that part of the land that is to be an exclusive occupancy under the contract, and not to the whole of the land.
The landholder duty provisions allow the tracing of interests through linked entities. Amendments to section 158 clarify that interests can be traced through trusts and partnerships. It also ensures that where a person holds property in different capacities, the property holdings will be treated as separate property holdings for the purposes of the tracing provisions.
The amendments clarify the method for determining the value of property secured by a mortgage (for mortgage duty) when the property relates to property that is partly within and partly outside New South Wales.
Amendments to section 216(3) make it clear that more than one relevant document can be used for the purpose of determining the value of property affected by the mortgage. The document or documents used must provide a value of all the property affected by the mortgage.
New section 216(6) provides that, for a mortgagor who is a member of a group, the consolidated accounts of the group (if available and relevant) are to be used for the purpose of calculating the dutiable proportion for the mortgage. In that case, the only debt or equity to be taken into account is the debt or equity as disclosed in the consolidated accounts. This last requirement prevents a practice of double counting which reduces the dutiable proportion of the mortgage.
New section 216A provides a method of calculating the value of the goodwill of a business or intellectual property in New South Wales, using a test similar to the test for business assets in Chapter 2 of the Duties Act 1997.
Transfers between custodians
New section 59B provides for nominal duty on certain transfers of dutiable property that are made by the custodian for the trustee of a trust to another custodian of the trustee of the trust, where there is no change in the beneficial ownership of the dutiable property and certain other requirements are met.
Transfers in connection with persons changing superannuation funds
An amendment to section 61 extends an existing duty concession for certain transfers that are made in connection with a person changing superannuation funds. The concession is extended to a transfer of marketable securities from a life company or custodian for a life company to the trustee, or the custodian of the trustee, of a superannuation fund that is made in the consideration of the surrender or termination of a policy of life insurance issued by the life company.
Fraudulent or void transactions
New section 65(24) establishes a duty exemption for certain dutiable transactions that are made to rectify the consequences of fraudulent conduct or as a consequence of a court declaration that a registered transfer is void or voidable.
Transfers of primary production land
An amendment to section 274 makes it clear that an exemption for the transfer of land used for primary production between family members does not apply if the person acquiring the land does so as a trustee.
Charitable and benevolent bodies
Amendments to sections 275 and 275A extend the exemption from transfer duty for charitable or benevolent bodies to transactions that occur by way of vesting or surrender of interests in property.
Mortgage-backed and asset-backed securities
The amendments extend an existing exemption for securitisation arrangements so that it applies not only to loan-backed securities but to any asset-backed security. Asset-backed security is defined. The amendments also ensure that the exemption applies to transactions or instruments to the extent that they relate to securitisation only. A similar limitation for securitisation arrangements that relate to mortgage-backed securities is included. Sections 282 – 284 apply.