Frequent questions

This page will be updated as information becomes available.

Duties

First Home Buyers Assistance

When does the duty exemption for first home buyers apply?

The exemption for first home buyers will apply to contracts executed on or after 1 July 2017 for properties up to $650,000. For properties valued between $650,000 and $800,000, duty concessions will apply.

Are there any changes for vacant land?

There are no changes to the cap for vacant land.

Does this apply only to new homes?

No, the exemption applies to new and existing homes purchased by first home buyers.

Does the 1 July 2017 date refer to the date the contracts were exchanged or settled?

The 1 July 2017 date refers to the date the contracts were exchanged.

Does a first home purchase refer to a first investment home purchase or the first owner-occupied home purchase?

First home purchase refers to the first home you purchase which you must occupy for a continuous period of 6 months, commencing within 12 months of settlement.

I have just settled, what can I do to get the benefits?

If you settled before 1 July 2017, you are only entitled to the benefits that were available at that time. Please check our website for more information.

Can I rescind the contract and enter into a new contract after 1 July 2017 and get the new benefits?

As your contract is already executed, you are liable to pay duty. If you rescind and enter into the contract for the same property after 1 July 2017 you will not be eligible for the new benefits.

My client has just exchanged contracts and is in the cooling off period. Can we rescind under the cooling off provisions and re-exchange later?

As your contract is already executed, you are liable to pay duty. If you rescind and enter into the contract for the same property after 1 July 2017 you will not be eligible for the new benefits.

My contract is dated before 1 July 2017. Are these changes retrospective?

No, the changes to the First Home Buyers Assistance scheme are not retrospective.

Does this mean yet another form? Will we need to complete another Declaration or a Statutory Declaration?

No additional forms are anticipated at this stage. However some existing forms will need to be modified and in the case of the new scheme the old form will be replaced with a new one.

If the parties entered into a Put & Call option before 30 June 2017 to be exercised after 30 June 2017, would the purchaser be able to claim the exemption (or reduction as applicable) or would the Option be the determining date?

If the exercise of the option occurs on or after 1 July 2017, you will be able to claim the new exemption or reduction.

Shared Equity Scheme

Who is an approved equity partner?

Approved equity partner means:

How does the shared equity scheme work?

The home buyer must acquire not less than a 20% share in the ownership of the property. The equity partner has a right to share in any capital gains on sale or refinancing but have no right to occupy the home. The home buyer can purchase more equity from the equity partner with no additional duty.

If I have an equity partner am I entitled to the First Home Buyers Assistance Scheme and the First Home Owner Grant?

If the purchase price of the property meets the requirements for the First Home Buyers Assistance Scheme, you will be entitled to the exemption or concession and if the total purchase price meets the cap for first home owner grant and all conditions of the grant are met, you will be entitled to the grant.

Does this scheme replace the shared equity arrangements where I could purchase my first home with another person who is not approved?

The shared equity scheme does not replace the shared equity arrangements. That scheme is still available.

If I purchase my first home under a Shared Equity Scheme, will I still have to pay land tax?

The principal place of residence exemption will be extended to land used and occupied by an owner under a shared equity scheme as defined above. The exemption will apply from the 2018 tax year.

First Home Owner Grant (New Homes)

Are there any changes to the First Home Owner Grant (New Homes) scheme?

Yes. On and from 1 July 2017, the eligibility cap has been decreased from $750,000 to $600,000. This applies to contracts to purchase new homes, entered into on or after 1 July 2017. The cap of $750,000 still remains in case of comprehensive home building contracts to build a new home, or the building of a home by an owner builder.

Will I get the Grant if I purchased vacant land and am building a new home for a total cost of $740,000?

Yes, if you are building a new home you will receive the $10,000 grant. The cap for building a new home is still $750,000.

If I exchanged contracts before 1 July 2017 and settled after 1 July 2017 and the purchase price was greater than $600,000 but less than $750,000 would I be eligible for the grant?

Yes, you would be eligible for the grant because your contract was executed before 1 July 2017.

If I purchase an existing home would I be eligible for the Grant?

No, the Grant is only available for new homes or the building of a new home, not an existing home.

Off the plan

If I am an investor and I enter into an off the plan purchase agreement would I be eligible for the 12 month deferral of my liability?

If you enter into an off the plan purchase agreement on or after 1 July 2017, you would not be eligible for the 12 month duty deferral. You will need to pay duty within 3 months from the date of the contract.

If I am a purchaser and I wish to get the deferral, what do I do?

If you are a purchaser and you wish to get the deferral, you must declare your intention to occupy the property for a continuous period of 6 months, commencing within 12 months from the completion of the sale or transfer.

What if I don’t meet the residence requirement?

If you don’t meet the residence requirement, duty together with interest and penalty tax may apply from the normal liability date.

New Home Grant

Will the New Home Grant of $5,000 still be available after 30 June 2017?

The New Home Grant providing a $5,000 grant will not be available for contracts entered into after 30 June 2017. That scheme will be closed.

Is there another scheme replacing the New Home Grant for non-first home buyers?

No.

Surcharge Purchaser Duty

When does the surcharge purchaser duty rate increase and by how much?

The surcharge purchaser duty rate will increase for residential property acquired by a foreign person on or after 1 July 2017. The rate will increase from 4 per cent to 8 per cent.

If I am an Australian-based developer do I pay surcharge purchaser duty?

If you are an Australian-based developer you will pay surcharge purchaser duty when you purchase the land. However, you will be entitled to a refund on the sale of a new home to a person who is not associated to the corporation.

What does an Australian corporation mean?

An ‘Australian corporation’ means a corporation that is incorporated under the Corporations Act 2001 (Cth).

When does this exemption take effect?

This exemption is retrospective and will take effect from 21 June 2016.

Are commercial residential properties exempt from surcharge purchaser duty?

Yes, commercial residential properties are exempt from surcharge purchaser duty. This exemption is retrospective to 21 June 2016.

What does commercial residential property mean?

Guidelines will be issued to identify classes of commercial residential property that will be exempt.

I am a New Zealand citizen with a Special Category visa (subclass 444), am I exempt from surcharge purchaser duty on my principal place of residence?

If you are a New Zealand citizen who holds a Special Category visa (subclass 444), you will be exempt from surcharge purchaser duty if you reside in the property as your principal place of residence for a continuous period of 200 days commencing within 12 months from the liability date.

I am a permanent resident, am I exempt from surcharge purchaser duty?

If you are a permanent resident, you will be exempt from surcharge purchaser duty if you reside in the property as your principal place of residence for a continuous period of 200 days commencing within 12 months from the liability date.

Surcharge Land Tax

When does the surcharge land tax rate increase?

Surcharge land tax rate will increase from 0.75 per cent to 2 per cent for the 2018 tax year. For the 2017 tax year the rate will still be 0.75 per cent.

If I am an Australian-based developer do I pay surcharge land tax?

If you are an Australian based developer you will be exempt from surcharge land tax upon the sale of a new home to a person who is not associated to the corporation. If you have already paid surcharge land tax, a refund may apply.

What does an Australian corporation mean?

An ‘Australian corporation’ means a corporation that is incorporated under the Corporations Act 2001 (Cth).

When does this exemption take effect?

This exemption is retrospective and will take effect from 21 June 2016.

Are commercial residential properties exempt from surcharge land tax?

Yes, commercial residential properties will be exempt from surcharge land tax. This will take effect from the 2017 tax year.

What does commercial residential property mean?

Guidelines will be issued to identify classes of commercial residential property that will be exempt.

I am a New Zealand citizen with a Special Category visa (subclass 444), am I exempt from surcharge land tax?

If you are a New Zealand citizen, who holds a Special Category visa (subclass 444), you will be exempt from surcharge land tax if you reside in the property as your principal place of residence for a continuous period of 200 days after the taxing date and before the end of the relevant tax year.

I am an Australian permanent resident who is not a New Zealand citizen, am I exempt from surcharge land tax?

You will be exempt from surcharge land tax if you reside in the property as your principal place of residence for a continuous period of 200 days after the taxing date and before the end of the relevant tax year.

Insurance Duty

Lenders Mortgage Insurance (LMI)

Is the Lenders Mortgage Insurance only for first home buyers?

No. This saving will apply to all borrowers where a Lenders mortgage insurance policy is taken out.

How does the exemption affect my payment of my lender’s fee for its LMI before 1 July 2017?

For LMI policies that come into effect before 1 July 2017, duty will still apply. That is, your payment of the fee to your lender for its LMI premium will be subject to the NSW Government’s current stamp duty requirement.

There may be situations where a quote has been provided for a LMI policy prior to 1 July 2017 and this quote includes an amount for NSW duty even though settlement on the purchase of the property will not take place until after 1 July 2017 and the LMI policy for the purchase is exempt from duty. The Government is working with insurers and lenders to ensure that such amounts are returned to borrowers.

There may also be times wherethe security provided for the loan includes property in another State or Territory. Insurance duty may still be payable in that State or Territory on the LMI policy and this cost may be passed on to the borrower.

How do I know if I am entitled to a refund from my lender if the settlement of my loan occurred on or after 1 July 2017?

For LMI that come into effect on or after 1 July 2017, duty will no longer apply. However, if the settlement of your loan occurred on or after 1 July 2017 and you are unsure whether you are entitled to a refund from you lender, you should contact your lender to discuss your situation.

If I am entitled to a refund from my lender, who should I contact to arrange my refund?

If you are entitled to a refund from your lender, you should contact your lender to discuss your situation.

What if I’m an insurance company and have paid OSR duty on LMI policies effected on orafter 1 July 2017?

It is anticipated that insurers will not pay OSR any duty on LMI policies effected on or after 1 July 2017. The Duties Act contains provisions that enable OSR to offset a payment where an amount has been refunded to the insured or the borrower. OSR is unable to provide a refund to a lender or borrower.

Can an insurance company request a refund for any duty paid on LMI policies effected or renewed before 1 July 2017?

No - the exemption only applies to insurance policies effected on or after 1 July 2017.

Where can I find out more information about lenders’ mortgage insurance?

Find out more about lenders’ mortgage insurance by reading the Insurance Council of Australia’s LMI Fact Sheet.

Crop & Livestock Insurance (Type C)

I have a policy that takes effect in December 2017 but the premium is not due until January 2018. Is this policy liable to duty?

Yes, as the policy is effected prior to 1 January 2018 it will remain liable for duty. It does not matter when the premium is paid.

What if the premium is being paid in instalments?

If a policy is effected or renewed before 1 January 2018 it will remain liable for duty. It does not matter if the premium is paid before or after 1 January 2018 or if the premium is paid in instalments.

What if I am asked to pay duty on a policy effected on orafter 1 January 2018?

If the policy covers crop and/or livestock insurance as well as other risks, then the premium will require apportionment between the different types of risks to determine the duty payable on the part of the premium that relates to the other risks.

Similarly, if the policy applies across multiple States or Territories then the premium will require apportionment in order to calculate any duty payable for each State or Territory.

What if I took out crop or livestock insurance before 1 January 2018, can I receive a refund?

No. The exemption only applies to insurance policies effected or renewed on or after 1 January 2018.

Small Business Exemption

How would an insurer know I am a small business so I am not charged duty on my policy?

An insurer will require the insured to provide a small business declaration. This is a declaration by the insured, in writing, to the effect that the person is a small business at the time that the contract of insurance is effected or renewed.

What happens if I claim the small business exemption I am not entitled to?

In addition to a penalty of up to $11,000 the insured may be required by the insurer to pay to the insurer an amount equal to the duty, together with any interest or penalty tax payable. The insurer may recover this amount as a debt if the amount is not paid.

What if I took out the insurance before 1 January 2018, can I receive a refund?

No. The exemption only applies to insurance policies effected or renewed on or after 1 January 2018.

What if the policy covers multiple risks?

If the policy covers multiple types of insurance, then the premium will require apportionment between the different types in order to determine the duty payable.

Similarly, if the policy applies across multiple States or Territories then the premium will require apportionment in order to calculate any duty payable for each State or Territory.

What if the premium is being paid in instalments?

If a policy is effected or renewed before 1 January 2018 it will remain liable to duty. It does not matter if the premium is paid before or after 1 January 2018 or if the premium is paid in instalments.

What if I am a small business and my insurance policy shows I am being charged duty after 1 January 2018?

A small business is not liable to duty for certain types of Insurance where the premium is paid on or after 1 January 2018. The policy may include multiple types of insurance which may not always be clear. Duty will continue to apply to other types of insurance and this may be why you will still see duty on your policy after 1 January 2018. Contact your insurer if you require further information.

Last updated: 21 June 2017