Frequent questions
Question and Answers regarding abolition
- Does duty apply if a lease instrument (including agreement for lease) is first executed before 1 January 2008, but the lease only commences on or after 1 January 2008?
Yes, lease duty will still apply to lease instruments (including agreements for lease) first executed before 1 January 2008, even if the lease has not commenced.
- Will lease instruments executed after 1 January 2008 need to be marked exempt?
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
These transactions remain subject to transfer duty.
- If a lease includes a lump sum payment that is ‘rent’ is it still necessary for the document to be marked by OSR?
Yes, all leases or agreements for lease that include a lump sum payment need to be considered by OSR in order to determine if the payment is classified as a premium.
- Will duty apply in respect of a variation of a lease instrument if the variation is made on or after 1 January 2008?
No, 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.
Refunds
- Are refunds available if the variation of a lease instrument reduces the cost of the lease?
No refund is available if the lease is varied to reduce the cost of the lease.
- Is there a pro-rata refund of duty for the period after 1 January 2008 where a lease instrument was entered into before 1 January 2008 and lease duty has been paid?
Lease instruments executed before 1 January 2008 are liable on the rent payable for the entire term. No refunds will be provided for unexpired lease terms after 1 January 2008 on which duty has been paid.
- Are lease duty refunds still available if a lease is terminated or surrendered?
Yes, refunds will still be available if a lease is terminated or surrendered. However, a refund will not be made if the lessee or an associated person occupies or proposes to occupy the premises at any time after termination.
Estimate assessments
- How will the OSR deal with a lease instrument that was executed before 1 January 2008 that had an unascertainable cost component for which there is an estimate date on or after 1 January 2008?
The lease is still liable to duty for its entire term. The first of those estimate dates to occur on or after 1 January 2008 will be taken as the final estimate date. The lessee must provide a satisfactory estimate of the total cost of the lease and duty will be payable as if that final estimate were the full cost of the lease.
- If a final estimate date after 1 January 2008 has been set, can that date be brought forward?
If a lessee can provide a satisfactory estimate of the total cost of the lease before the next reappraisal date, the lease instrument can be stamped on a final basis using that estimate, and it will be treated as though it was the final estimate of the total cost of the lease.
- If the amount of cost component actually paid (after the final estimate date) is higher than the estimated amount on which duty has been paid, will additional duty be payable?
No, you do not have to pay any more duty if the actual amount is higher than the estimated amount.
- Is there a refund if the amount of cost component actually paid (after the final estimate date) is lower than the estimated amount on which duty has been paid?
No, you do not get a refund if the amount of cost component actually paid is lower than the estimated amount.
