Refinancing
A refinancing mortgage means a mortgage that:
secures the amount of the balance outstanding under an earlier mortgage that is discharged or to be discharged as part of the arrangements for the new mortgage
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.
A refinancing mortgage is taken to have been stamped with ad valorem duty as a mortgage in respect of 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 been paid under this Act or in relation to which an exemption from duty has been obtained
$1,000,000
Note: this cap does not apply to refinancing land used for primary production or aquaculture.
What does 'part of it' mean?
where lots A, B and C were originally secured and in a refinancing only lots A and B are secured and,
where lots A, B and C were originally secured and in a refinancing additional property is also secured, for example lots A, B, D and E.
As long as one of the properties secured by the original mortgage is secured by the refinanced mortgage the concession would apply.
Mortgages are created to secure an advance to the same borrower if, either directly by the mortgages themselves or indirectly through one or more collateral arrangements, the same person obtains the advances secured by them.
Duty at the rate of $4 per $1,000 or remaining part of $1,000 is payable on the amount by which the advance made under a re-financing mortgage exceeds the maximum amount secured by the earlier mortgage.
If an original borrower dies or is divorced or is a partner in a de facto relationship that has been terminated, the re-financing exemption still applies if proper evidence is given.
Complete the Application for exemption from mortgage duty: Refinancing of loans (ODA 011) to apply for an exemption from mortgage duty due when refinancing your loan.
Transfers of mortgages
Section 227A prevents persons from transferring mortgages in order to avoid liability for mortgage duty.
