Duty on mortgages was abolished on 1 July 2016.
Mortgage duty is duty charged on the amount secured by a mortgage.
The amount secured by a mortgage is the amount of any advance made under the agreement, understanding or arrangement for which the mortgage is security.
Mortgage duty is paid within 3 months after the date of the first signing the document or the date of an advance.
What is a mortgage?
An instrument is a mortgage if it is:
a security by way of mortgage or charge over property wholly or partly in New South Wales (NSW) at the liability date, or
a security by way of a transfer or conveyance of any property in NSW that is held in trust to be sold or otherwise converted into money, redeemable before such a sale or conversion either by express stipulation or otherwise, except where the transfer or conveyance is made for the benefit of creditors who accept the transfer or conveyance in full satisfaction of debts owed to them, or
an instrument that, on the deposit of documents of title to property in NSW or instruments creating a charge on property in NSW, becomes a mortgage or evidences the terms of a mortgage.
When does a liability arise?
A mortgage becomes liable to duty on the date of its first execution.
A mortgage becomes liable to additional duty on the making of an advance or further advance if, as a result of that advance or further advance, the amount secured by the mortgage exceeds the amount secured by the mortgage at the time a liability to duty last arose under the Duties Act 1997.
An instrument of security that does not affect property in NSW at the date of first execution but that affects land in NSW at any time within 12 months after that date becomes liable to duty as a mortgage on the date on which it first affects the land, unless it is exempt from duty.
An instrument of security that does not affect property in NSW at the date of first execution but that, at any time after execution, affects relevant property in NSW identified in the instrument or identified under an arrangement in place when the instrument was first executed, becomes liable to duty on the date it first affects that property, unless it is exempt from duty.
An instrument that, on the deposit of documents of title to property in New South Wales or instruments creating a charge on property in NSW, becomes a mortgage or evidences the terms of a mortgage becomes liable to duty as a mortgage on the deposit of the documents or instruments.
Rates and thresholds
What are the current rates and thresholds?
The current rate of duty is:
|Amount secured||Rate of duty|
|$0 – 16,000||$5|
|Over $16,000||$5 plus $4 for every $1,000, or part of $1,000, over $16,000|
|Further advances||$4 for every $1,000, or part of $1,000 of the amount secured|
Use our Mortgage duty calculator to estimate your liability.
If a mortgage, together with any other instruments of security, secure or partly secure the same money they must be assessed as a mortgage package. It does not matter when the other instruments of security were first executed.
Duty on a mortgage package is to be assessed as if the instruments comprising the mortgage package, to the extent that they secure the same moneys, were a single mortgage.
One of the mortgages in the mortgage package is stamped, or upstamped, with any ad valorem duty payable for the mortgage package and each other mortgage in the mortgage package is stamped as a collateral mortgage with duty of $50.
Multistate mortgages are mortgages that cover property both in and out of NSW. The mortgages may be:
Mortgages are liable for duty in NSW on a proportion of the advance, where:
the amounts are secured by a single mortgage, for example a company Deed of charge
the property secured is located both in and out of NSW.
Where amounts are secured by two or more instruments of security, where at least one is a mortgage securing property in NSW, duty is payable on the dutiable proportion of the advance on the NSW mortgage.
In the case of a further advance, a mortgage package includes an instrument of security executed after the initial liability date for a mortgage package that secures or partly secures the same money as the original mortgage package. It does not matter when the other instruments of security were first executed.
How do I calculate the dutiable proportion?
Dutiable proportion is calculated using the following formula:
DP = AS x V/T
DP is the dutiable proportion.
AS is the amount secured by the mortgage or mortgage package.
V is the value of all NSW property affected by the mortgage(s).
T is the total value of all property affected by the mortgage(s).
Multistate mortgages need to be lodged with a Multi-jurisdictional Statement (ODA033).
Use our Multistate mortgage duty calculator to estimate your liability.
A collateral mortgage is chargeable with a minimum duty of $50.
In some circumstances a collateral mortgage will form part of a multistate mortgage package.
A caveat under the Real Property Act 1900, in which an estate or interest is claimed under an unregistered mortgage is chargable with duty.
The amount of duty payable is:
the same amount chargeable on the mortgage if the mortgage is chargeable but not stamped with mortgage duty
$50 if the mortgage is stamped, or is not chargeable, with mortgage duty under section 221B (owner-occupied housing mortgage) or 221C (investment housing mortgage) of the Duties Act 1997.
Exemptions and concessions
Are there any mortgages exempt from mortgage duty?
Mortgages exempt from mortgage duty include:
mortgages for the purpose of owner occupied housing, including:
financing the purchase of a residence
financing the construction of a residence
financing alterations or additions to a residence
financing the purchase of residential land
repaying another advance, if the advance was for owner occupied housing.
mortgage for the purpose of investment housing, including:
financing the purchase of investment housing
financing the construction of investment housing
financing alterations or additions to investment housing
repaying another advance, if the advance was for investment housing.
Note: Exemption applies to owner occupied housing and investment housing mortgages where the borrower(s) is(are) natural person(s).
mortgages for the sole purpose of providing security imposed on the grant of bail in criminal proceedings
mortgages taken by a non-profit organisation in conjunction with a lease
mortgages of any ship or vessel, or part, interest or share or property of any ship or vessel
mortgages given by the Commonwealth or NSW Government or any public statutory body constituted under a law of NSW
mortgages under the Liens on Crops and Wool and Stock Mortgages Act 1898
a charge over land that is created under an agreement for the sale of land if any part of the deposit or balance of the purchase price is paid to the vendor before completion of sale or transfer
an agricultural goods mortgage under the Security Interests in Goods Act 2005
mortgages provided to a charitable or benevolent organisation.
To apply for the exemption, submit an Application for Exemption – Charitable and Benevolent Bodies (ODA048)
mortgages that secure an amount not exceeding $35,000 under a consumer credit contract and no other advance.
To apply for the exemption, submit an Application for Mortgage Duty Exemption – Consumer Credit Contracts (ODA035)
a mortgage to a natural person or strata corporation for the purpose of farm machinery or a commercial vehicle.
To apply for the concession, submit a Mortgage Duty Concession Application – Farm Machinery and Commercial Vehicles (ODA010)
additional advances secured by a mortgage if the advances do not exceed $10,000 in any 12 month period, not including the 12 months from the initial advance.
A refinancing mortgage means a mortgage that:
secures an amount for the balance of an outstanding under a previous mortgage that is discharged or to be discharged as part of the refinance
is created to secure an advance to the same borrower, not necessarily the provider of the security, as under the earlier mortgage
is over the same property in NSW or substantially the same property, or part of the same property as the earlier mortgage.
Part of the same property is where one of the properties secured by the original mortgage is secured by the refinanced mortgage.
Part of the same property is where one of the security properties for the original mortgage is also a security property for the refinanced mortgage.
Duty is payable at the further advance rate on the amount that exceeds the duty-free refinancing amount.
The duty-free refinancing amount is the lesser of the following amounts:
the amount secured by the earlier mortgage which duty has already been paid or in relation to which an exemption from duty has been obtained
Note: this cap does not apply to refinancing land used for primary production or aquaculture.
If the amount does not exceed the duty-free refinancing amount, no duty is payable but the mortgage needs to be stamped exempt.
To apply for full or partial exemption because the mortgage does not exceed the duty-free refinancing amount, submit an Application for Exemption from Mortgage Duty: Refinancing of Loans (ODA011).