Multistate mortgage
Single mortgage
Where:
amounts are secured by a single mortgage, for example a company Deed of Charge, and
the property secured is located both in and out of NSW,
the mortgage is only liable in NSW on a proportion of the advance. This is known as the dutiable proportion.
Mortgage package
Similarly, where amounts are secured by two or more instruments of security, where at least one of the instruments is a mortgage securing property in NSW and the other instrument/s secure property outside NSW, duty will be payable on the NSW mortgage - but again, only on a dutiable proportion of the advance.
Two or more instruments of security are taken to be part of a mortgage package only if the instruments were first executed within any period of 28 days and are taken, to be first executed on the day the last of the instruments to be executed was executed.
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 mortgage package.
Dutiable proportion
Dutiable proportion is to be calculated using the following formula*:
where
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.
*This formula applies to advances made on or after 1 July 2006 only. For advances made prior to this date, please contact us for more information.
Assessment of mortgage packages where one or more instruments secure a limited amount
On and from 1 July 2006 the amendments to the Duties Act by the Duties Amendment (Abolition of State Taxes) Act 2006 makes provision for the assessment of mortgages packages if the amount secured by the mortgage over property in Australia is a definite and limited sum, or the amount secured by the mortgage package over property in NSW is a definite and limited sum.
The provisions ensure that the dutiable proportion of any advances made in respect of the mortgage is calculated by reference to the following:
in the case of a mortgage package with an Australian limit, the dutiable proportion of that limit;
in the case of a mortgage package with a NSW limit, the dutiable proportion of all advances made under the mortgage, or the NSW limit, whichever is the lower.
For example
Advance of $50 million secured by property in NSW and QLD
NSW mortgage limited to $15 million
Value of NSW property $30 million and QLD property $30 million
NSW proportion of advance is $25 million. NSW limit is $15 million
Duty payable in NSW on $15 million (the lower amount)
