Amendments to Budget Measures Act
Assent 16 June 2005
Amendment of Duties Act 1997 No 123
Refinancing concession
At present, mortgage duty is not payable on a mortgage where the mortgage is created for refinancing purposes, that is, if the mortgage secures an amount borrowed under an earlier mortgage in respect of which mortgage duty has already been paid.
The amendments impose a limit on this concession, so that mortgage duty is not payable on the first $1,000,000 of the amount secured by the earlier mortgage. Mortgage duty will be payable at the rate of $4 per $1,000 above that maximum.
The changes do not apply to refinancing mortgages where the property secured is land used for primary production or aquaculture.
A provision is also introduced to prevent persons from transferring mortgages in order to avoid liability for mortgage duty (section 227A).
The amendments have effect from 1 August 2005.
Insurance duty
The amendments divide general insurance into 3 types, and provide for a levy of 9% on type A insurance, 5% on type B insurance and 2.5% on type C insurance. Type C insurance includes crop insurance and livestock insurance. Type B insurance includes motor vehicle insurance, aviation insurance, disability income insurance, occupational indemnity insurance and hospital and ancillary health benefits insurance. Type A insurance is all general insurance other than type B or C insurance.
The amendments have effect from 1 September 2005.
Concessions for vendor duty and land-rich disposal duty
An exemption from vendor duty applies where the sale price does not exceed the purchase price by 12 percent. If the land-related property is held by the vendor subject to a trust, the vendor acquisition date is the date on which a dutiable transaction in respect of that property was last chargeable with ad valorem duty under Chapter 2. For land rich disposal duty the disposer acquisition date is when the beneficial owners first became beneficially entitled to the interest being disposed of. These amendments apply to transactions entered into on or after 24 May 2005
Amendment of Land Tax Act 1956 No 27
The amending Act re-introduces a tax-free threshold for land tax. The new threshold will be $330,000 for the 2006 land tax year and will be indexed thereafter. If a land owner's aggregate taxable land value is more than $330,000, the land will be taxed at a rate of $100 plus 1.7 cents for each $1 in excess of the threshold.
Amendment of Land Tax Management Act 1956 No 26
The amending Act provides for the determination of the tax threshold for land tax in connection with the amendments made by Schedule 2. It provides for the indexation of that threshold by the Valuer-General to account for movements in land values, and for other consequential (including savings and transitional) matters.
For more information
