Duty was abolished on lease instruments first executed on or after 1 January 2008. The abolition of duty on leases does not affect any obligation to pay duty in respect of a lease instrument and a variation of a lease instrument executed before 1 January 2008.
Stamping is not required unless the document falls under one of the following categories:
a) A lease or agreement for lease in respect of which a premium is paid or agreed to be paid (not including any premium paid or payable for a lease of premises in a retirement village within the meaning of section 5 of the Retirement Villages Act 1999)
b) A lease entered into pursuant to an option if an amount is paid or payable for the grant of the option
c) A transfer or assignment of lease
d) A surrender of lease
Such transactions remain subject to transfer duty.
Lease duty will not apply to a variation of lease made on or after 1 January 2008 even if the variation to the lease is to increase the cost of the lease that was executed before 1 January 2008.
If any lease executed before 1 January 2008 has any unascertainable cost components for which there is an estimate date on or after 1 January 2008, a final estimate of the cost of the lease will be made on the first such date on or after 1 January 2008. The lease instrument will be chargeable with duty as if that final estimate were the full cost of the lease, and no further estimates of the cost of the lease will be made.
Definition of a lease
a lease of land in NSW or an agreement for a lease of land in NSW, or
an agreement (such as a licence) by which a right to use land in NSW at any time and for any purpose is conferred on or acquired by a person.
The rate of duty is 35 cents per $100 (or remaining part of $100) of the total cost of the lease.
In addition, duty at the rate chargeable on a transfer of land, is chargeable on the amount of any premium paid or payable in respect of the lease (including leases first executed on or after 1 January 2008). See sections 8, 9 and 21(5) of the Duties Act 1997. Exemptions are contained in section 53A and 65(16).
OSRAssist takes you through a series of questions and gives you an indication of whether or not you need to pay duty or are entitled to an exemption