Amendments to Duties Act 2005
Amendments to the Duties Act 1997 No. 123
- Section 61 Transfers of property in connection with persons changing superannuation funds
- Section 65(15) Home equity release schemes
- Eligibility for First Home Plus
- Exemption from call option assignment duty - section 111
- Land rich duty
- Stamping of mortgages secured on interstate property
- Payment of duty on mortgages associated with debentures - section 226
- Exemption for transferred mortgages
- Insurance duty concession - section 233
- NSW Legislation website
The amendments to the Duties Act 1997 No. 123 commence on the date of assent except where otherwise specified.
Section 61 - Transfers of property in connection with persons changing superannuation funds
Section 61 of the Duties Act 1997 exempts from transfer duty certain transfers made between the trustees of superannuation funds where the transfer is made in connection with a member of the fund ceasing to be a member of, or entitled to benefits in respect of, one fund and becoming a member of, or entitled to benefits in respect of, another fund.
The amendments extend this exemption to transfers that are made between custodians of the trustee of such funds, or between a custodian and the trustee, for the same purpose. It also extends the exemption to a transfer of marketable securities that is made from a trustee of a pooled superannuation trust (PST), in exchange for a redemption of units in the trust, to the trustee or a custodian of the trustee of a superannuation fund, where members are moving from the fund owning the units in the PST to another fund.
Section 65(15) - Home equity release schemes
The amendments provide for an exemption from duty on certain transfers that are made in connection with a home equity release scheme. These are schemes that enable an owner of residential property to obtain funds from a person (usually a bank) in exchange for an agreement that a proportion of the value of the residential property will be paid to that person on the owner’s death or some other specified event. In order for the exemption to apply the scheme must be a scheme of a kind approved by the Chief Commissioner.
Eligibility for First Home Plus
The First Home Plus scheme provides for an exemption from, or reduction in, duty on the purchase of a first home. Amendments to section 73 increase the minimum age for persons making applications under the First Home Plus scheme from 16 years to 18 years.
This applies to applications made on or after the commencement date of the amendments.
Exemption from call option assignment duty - section 111
At present, the Duties Act 1997 treats an assignment of a call option over property as a transfer of the property in certain circumstances. The amendment exempts from the duty an assignment that is made to a body established solely for the purpose of raising funds in relation to an investment scheme promoted by the person who makes the assignment.
Land rich duty
The amendments limit the definition of associated person for the purposes of the land rich duty provisions, so that responsible entities of managed investment schemes will only be considered to be associated if they share a member who has a significant interest in both schemes (section 163DA).
Amendments to section 162ZU extend the criteria for registration as a wholesale unit trust scheme to include unit trust schemes in which certain foreign entities invest, if they invest in those schemes in a similar capacity to other qualifying investors in a wholesale unit trust scheme. It also makes it clear that certain unit trust schemes in which responsible entities for managed investment schemes invest (and which are not already covered by the registration criteria) may also be eligible for registration as a wholesale unit trust scheme.
Stamping of mortgages secured on interstate property
The Duties Act 1997 provides for the apportionment of the mortgage duty payable in cases where the property secured by the mortgage is partly within NSW and partly within another jurisdiction, to prevent persons from being charged with double duty.
An amendment to section 218 provides that, where a mortgage is stamped before an advance is made, it may be stamped only for an amount that does not exceed the value of the property affected by the mortgage at the stamping date. The provision prevents an avoidance practice by which the proportion of New South Wales property secured by a mortgage is artificially reduced by omitting New South Wales property from the mortgage until after the date on which liability for duty is assessed. The amendment applies to any mortgage stamped on or after 15 November 2005, regardless of when the mortgage was first executed.
Payment of duty on mortgages associated with debentures - section 226
Section 226 of the Duties Act 1997 provides for a concession in respect of mortgage duty on advances in connection with debenture issues. The concession was limited, by amendments made to the Act in 2003, to mortgages executed before 24 June 2003. This amendment closes off the concession entirely. As a consequence if an advance or further advance is made, on or after 15 November 2005, in respect of a mortgage to which the concession would previously have applied, duty, or additional duty, is payable in respect of the advance or further advance.
Exemption for transferred mortgages
Section 227A of the Duties Act 1997 treats a mortgage that is transferred, in certain circumstances, as if it were a new mortgage on which no duty has been paid. The new mortgage is liable to mortgage duty accordingly.
The amendments add to the existing exemption from those provisions (where the mortgage is over land used for primary production) to the following transfers:
(a) a transfer of a mortgage between corporations who are members of the same group (if section 281 would apply),
(b) a transfer of a mortgage in connection with, or in preparation for creating, issuing, marketing or securing, a mortgage-backed security,
(c) a transfer of a mortgage from a person who holds the mortgage as trustee for another person to a new trustee appointed in substitution for the former trustee.
The new exemptions are taken to have commenced on 1 August 2005, which is when section 227A commenced.
Insurance duty concession - section 233
An amendment to section 233(3)(c) extends, until 31 January 2010, a duty concession for insurance policies issued under the Debtor Insurance Scheme of the Stock and Station Agents Association. The existing concession expired on 1 February 2005. The amendment is taken to have commenced on 31 January 2005.