Duties Act 1997 No 123
Current version for 28 October 2014 to date (accessed 23 November 2014 at 16:38)
Chapter 2Part 1

Part 1 Introduction and overview

8   Imposition of duty on certain transactions concerning dutiable property

(1)  This Chapter charges duty on:
(a)  a transfer of dutiable property, and
(b)  the following transactions:
(i)  an agreement for the sale or transfer of dutiable property,
(ii)  a declaration of trust over dutiable property,
(iii)  a surrender of an interest in land in New South Wales,
(iv)  a foreclosure of a mortgage over dutiable property,
(v)  a vesting of dutiable property by or as a consequence of an order of a court of this or another jurisdiction, whether inside or outside Australia,
(vi)  the enlargement of a term in land into a fee simple under section 134 of the Conveyancing Act 1919,
(vii)  a vesting of land in New South Wales by, or expressly authorised by, statute law of this or another jurisdiction, whether inside or outside Australia,
(viii)  a lease in respect of which a premium is paid or agreed to be paid.
(c)  (Repealed)
Note. There are other provisions in this Act that deem certain transactions to be a transfer of dutiable property under this Chapter, for example:
(a)  section 9A, which provides for certain circumstances in which a transfer of a partnership interest is taken to occur, and
(b)  section 9B, which provides for certain circumstances in which a transfer of an option to purchase land is taken to occur, and
(c)  section 9C, which provides for circumstances in which a novation of an agreement for the lease of land in New South Wales is taken to be a transfer of dutiable property, and
(d)  Part 2 of Chapter 3, which treats a transfer or assignment of an option to purchase dutiable property as a transfer of the dutiable property in certain circumstances.
(2)  Such a transfer or transaction is a dutiable transaction for the purposes of this Act.
(3)  In this Chapter:

declaration of trust means any declaration (other than by a will or testamentary instrument) that any identified property vested or to be vested in the person making the declaration is or is to be held in trust for the person or persons, or the purpose or purposes, mentioned in the declaration although the beneficial owner of the property, or the person entitled to appoint the property, may not have joined in or assented to the declaration.

lease means a lease of land in New South Wales or an agreement for a lease of land in New South Wales.

premium, in respect of a lease entered into pursuant to an option, includes an amount paid or payable for the grant of the option.

transfer includes an assignment, an exchange and a buy-back of shares in accordance with Division 2 of Part 2J.1 of the Corporations Act 2001 of the Commonwealth.

8A   Vesting of land in New South Wales by statute law

(1)  Without limiting section 8 (1) (b) (vii), land in New South Wales is vested under statute law if the law vests the land in an entity that the law states is the successor in law of, continuation of or same entity as, the entity in which the land was previously vested.
(2)  However, land in New South Wales is not vested under statute law on the registration of a company under Part 5B.1 of Chapter 5B of the Corporations Act 2001 of the Commonwealth.
(3)  The merger of a corporation (company A) with and into another corporation (company B) in circumstances where neither subsection (4) nor subsection (5) applies is taken to be a vesting of the land in New South Wales of company A in company B by statute law.
(4)  A merger of corporations (the merging corporations) in circumstances where another corporation (company C) results as a consequence of the merger is taken to be a vesting of the land in New South Wales of the merging corporations in company C by statute law.
(5)  A merger of corporations (the merging corporations) with and into each other in circumstances where each of the merging corporations continues in existence is taken to be a vesting in the merging corporations, jointly, of 50% (in value) of the land in New South Wales of the merging corporations by statute law.

9   Imposition of duty on dutiable transactions that are not transfers

(1)  The duty charged by this Chapter on a dutiable transaction referred to in section 8 (1) (b) is to be charged as if each such dutiable transaction were a transfer of dutiable property.
(2)  Accordingly, for the purpose of charging duty under this Chapter, in relation to a dutiable transaction specified in Column 1 of the following Table:
(a)  the property specified opposite the dutiable transaction in Column 2 is taken to be the property transferred (and a reference in this Act to property transferred includes a reference to such property), and
(b)  the person specified opposite the dutiable transaction in Column 3 is taken to be the transferee of the dutiable property (and a reference in this Act to a transferee includes a reference to such a person), and
(c)  the transfer of the dutiable property is taken to have occurred at the time specified opposite the dutiable transaction in Column 4 (and a reference in this Act to the time at which a transfer occurs includes a reference to such a time).


Table

Column 1

Column 2

Column 3

Column 4

Dutiable transaction

Property transferred

Transferee

When transfer occurs

agreement for sale or transfer

the property agreed to be sold or transferred

the purchaser or transferee

when the agreement is entered into

declaration of trust

the property vested or to be vested in the declarant

the person declaring the trust

when the declaration is made

surrender

the surrendered property

the person to whom the property is surrendered

when the surrender takes place

foreclosure

the mortgaged property

the mortgagee

when the foreclosure order is made

vesting by court order

the vested property

the person in whom the property is vested

when the order is made

enlargement of a term in land into a fee simple

the estate in fee simple

the person who acquires the estate in fee simple

when the term is enlarged

vesting by statute law

the vested land in New South Wales

the person in whom the land is vested

when the vesting by statute law occurs

lease

the leased property

the lessee

when the lease is entered into

9A   Transfer of partnership interest occurring on change in partnership arrangements

(1)  A transfer of a partnership interest is taken to occur when a change in partnership arrangements occurs.
(2)  A change in partnership arrangements occurs if:
(a)  a partner in an existing partnership retires so that a new partnership is formed (with or without the admission of new partners), or
(b)  a new partner is admitted to an existing partnership so that a new partnership is formed.
(3)  A new partnership is formed when a partner in an existing partnership retires, unless the partnership is wound up on that retirement (sometimes referred to as a general dissolution of the partnership).
(4)  A new partnership is formed whenever a new partner is admitted to an existing partnership.
(5)  For the purposes of this Act:
(a)  if a change in partnership arrangements occurs because of the retirement of a partner in an existing partnership, the retiring partner’s partnership interest is taken to be transferred to the partners in the new partnership (a retirement transfer), and
(b)  if a change in partnership arrangements occurs because of the admission of a new partner to an existing partnership, the new partner’s partnership interest is taken to be transferred to the partners in the new partnership (an admission transfer).
(6)  If a change in partnership arrangements results in both one or more retirement transfers and one or more admission transfers, duty is chargeable only on:
(a)  the retirement transfer or retirement transfers, if the dutiable value of the retirement transfer or retirement transfers exceeds the dutiable value of the admission transfer or admission transfers, or
(b)  the admission transfer or admission transfers, if the dutiable value of the admission transfer or admission transfers exceeds the dutiable value of the retirement transfer or retirement transfers.
(7)  This section does not affect liability for duty on a transfer of a partnership interest that occurs otherwise than because of a change in partnership arrangements.
Note. For example, a transfer of a partnership interest from one partner to another partner in an existing partnership will also be dutiable under this Chapter.
(7A)  To avoid doubt, a transfer of a partnership interest that is taken to occur under this section is a transfer of dutiable property and a reference in this Act to a transfer of dutiable property or a dutiable transaction includes a reference to such a transfer.
(8)  In this section, retirement of a partner includes retirement as a consequence of the death of a partner.

9B   Transfer of option occurring on nomination or other change

(1)  A transfer of an option to purchase land in New South Wales is taken to occur if, for valuable consideration:
(a)  another person is nominated to exercise the option, or
(b)  another person is nominated as purchaser or transferee of the land the subject of the option on or before the exercise of the option, or
(c)  the option holder agrees to a novation of the option, or otherwise relinquishes rights under the option, so that another person obtains a right to exercise the option or to purchase the land.
(2)  For the purposes of this Act, in a case referred to in subsection (1) (a) or (b):
(a)  the option is taken to be transferred when the nomination is made (and a reference in this Act to the time at which a transfer occurs includes a reference to such a time), and
(b)  the person nominated is taken to be the transferee of the option (and a reference in this Act to a transferee includes a reference to such a person).
(3)  For the purposes of this Act, in a case referred to in subsection (1) (c):
(a)  the option is taken to be transferred when the option holder agrees to the novation or otherwise relinquishes rights under the option (and a reference in this Act to the time at which a transfer occurs includes a reference to such a time), and
(b)  the person who obtains a right to exercise the option or to purchase the land is taken to be the transferee of the option (and a reference in this Act to a transferee includes a reference to such a person).
(4)  This section applies regardless of when the option is exercisable.
(5)  For the purposes of this section, anything done by a person under a power of appointment or other authority granted by an option holder is taken to have been done by the option holder.
(6)  To avoid doubt, a person who has a right to accept an offer to sell land has a right to purchase the land.
(7)  To avoid doubt, a transfer of an option to purchase land that is taken to occur under this section is a transfer of dutiable property and a reference in this Act to a transfer of dutiable property or a dutiable transaction includes a reference to such a transfer.
(8)  In this section:

option holder, in relation to an option to purchase land in New South Wales, means a person who has a right to purchase the land under the option (whether vested or contingent).

9C   Novation of agreement for lease

(1)  A novation of an agreement for the lease of land in New South Wales is taken to be a transfer of dutiable property as if:
(a)  the lessee’s interest in the agreement were dutiable property, and
(b)  the novation of the agreement were a transfer of that dutiable property.
(2)  For the purposes of this Act:
(a)  the transfer is taken to occur when the agreement for lease is novated (and a reference in this Act to the time at which a transfer occurs includes a reference to such a time), and
(b)  the new lessee is taken to be the transferee of the dutiable property (and a reference in this Act to a transferee includes a reference to such a person).
(3)  A reference in this Act to dutiable property includes, in relation to a transfer that is taken to occur under this section, a reference to a lessee’s interest in an agreement for the lease of land in New South Wales.
(4)  To avoid doubt, a reference in this Act to a dutiable transaction includes a reference to a transfer of dutiable property that is taken to occur under this section.

10   What form must a dutiable transaction take?

It is immaterial whether or not a dutiable transaction is effected by a written instrument or by any other means, including electronic means.

11   What is “dutiable property”?

(1)  Dutiable property is any of the following:
(a)  land in New South Wales,
(b)  transferable floor space (also known as heritage floor space), being floor space area that:
(i)  is recorded on a register kept by a local government council in New South Wales, and
(ii)  derives from the unutilised development potential of land in New South Wales that contains improvements of heritage value, and
(iii)  may, subject to obtaining all necessary consents and approvals, be utilised in the development of other land in New South Wales,
(c)  a land use entitlement,
(d)  shares:
(i)  in a NSW company, or
(ii)  in a corporation incorporated outside Australia that are kept on the Australian register kept in New South Wales,
Notes. Shares is defined in the Dictionary to include rights to shares.

Some shares (namely, shares quoted on the ASX or a recognised stock exchange) are not dutiable property—see subsection (2).

(e)  units in a unit trust scheme, being units:
(i)  registered on a register kept in New South Wales, or
(ii)  that are not registered on a register kept in Australia, but in respect of which the manager (or, if there is no manager, the trustee) of the unit trust scheme is a NSW company or is a natural person resident in New South Wales,
Notes. Units is defined in the Dictionary to include rights to units.

Some units (namely, units quoted on the ASX or a recognised stock exchange) are not dutiable property—see subsection (2).

(f)  (Repealed)
(g)  a business asset, being, at any relevant time:
(i)  the goodwill of a business, if the business has supplied goods in New South Wales, or provided services in New South Wales, to a customer of the business during the previous 12 months, or
(ii)  intellectual property that has been used or exploited in New South Wales during the previous 12 months, but only if the intellectual property is the subject of an arrangement that includes a dutiable transaction over goodwill referred to in subparagraph (i), or
(iii)  a statutory licence or permission under a Commonwealth law, if the rights under the licence or permission have been exercised, during the previous 12 months, in respect of New South Wales or in an area that includes New South Wales or a part of New South Wales,
Note. Intellectual property is defined in the Dictionary. Business assets are subject to apportionment under section 28.
(h)  a statutory licence or permission under a New South Wales law,
(h1)  a gaming machine entitlement within the meaning of the Gaming Machines Act 2001,
(i)  a partnership interest, being an interest in a partnership that has partnership property that is dutiable property elsewhere referred to in this section,
(j)  goods in New South Wales, if the subject of an arrangement that includes a dutiable transaction over any dutiable property (other than intellectual property) elsewhere referred to in this section, not including the following:
(i)  goods that are stock-in-trade,
(ii)  materials held for use in manufacture,
(iii)  goods under manufacture,
(iv)  goods held or used in connection with land used for primary production,
(v)  livestock,
(vi)  a registered motor vehicle,
(vii)  a ship or vessel,
(k)  an option to purchase land in New South Wales,
(l)  an interest in any dutiable property referred to in the preceding paragraphs of this section, except to the extent that:
(i)  it arises as a consequence of the ownership of a unit in a unit trust scheme and is not a land use entitlement, or
(ii)  it is, or is attributable to, an option over dutiable property, or
(iii)  it is an interest in a marketable security, being an interest that is traded on the Sydney Futures Exchange.
Note. In relation to interests in land, see clause 4 of the Dictionary.
(2)  Despite subsection (1), the following marketable securities are not dutiable property:
(a)  shares, or units in a unit trust scheme, that are quoted on the Australian Securities Exchange or a recognised stock exchange,
(b)  an interest in shares, or an interest in units in a unit trust scheme, if:
(i)  the shares or units are quoted on the Australian Securities Exchange or a recognised stock exchange, or
(ii)  the interest is quoted on the Australian Securities Exchange or a recognised stock exchange.
(3)  In the definition of business asset in this section, a reference to services provided to a customer includes a reference to anything done for a customer pursuant to a contractual obligation.
Note. Part 4 of this Chapter provides for the abolition, on 1 July 2016, of duty on transfers of some of the types of dutiable property listed above.

The following types of dutiable property cease to be dutiable property on 1 July 2016:

(a)  shares and units referred to in subsection (1) (d) and (e),
(b)  business assets referred to in subsection (1) (g),
(c)  statutory licences or permissions referred to in subsection (1) (h),
(d)  gaming machine entitlements referred to in subsection (1) (h1).

12   When does a liability for duty arise?

(1)  A liability for duty charged by this Chapter arises when a transfer of dutiable property occurs.
(2)  However, if a transfer of dutiable property is effected by a written instrument, liability for duty charged by this Chapter arises when the instrument is first executed.
(3)  A liability for duty in respect of a dutiable transaction that is charged with duty as if it were a transfer of dutiable property arises even if the dutiable property is not in existence at the time that the transfer is taken to have occurred, or the instrument effecting the transfer is first executed, as the case requires.
(4)  An electronic registry instrument is taken to be first executed when it is first digitally signed by a subscriber (within the meaning of the Electronic Conveyancing National Law (NSW)).

13   Who is liable to pay the duty?

Duty charged by this Chapter is payable by the transferee, unless this Chapter requires another person to pay the duty.

14   The liability of joint tenants

For the purpose of assessing duty charged by this Chapter, joint tenants of dutiable property are taken to hold the dutiable property as tenants in common in equal shares.

15   Necessity for written instrument or written statement

(1)  If a dutiable transaction that is liable to ad valorem duty under this Chapter is not effected by a written instrument, the transferee must make a written statement in an approved form.
(2)  The written statement must be made within 3 months after the liability arises.
(3)  (Repealed)
(4)  If a dutiable transaction is completed or evidenced by a written instrument within 3 months after the date on which the dutiable transaction occurs, the requirement to lodge a statement and pay duty in respect of the statement may be satisfied by the lodgment of and payment of duty on the written instrument within 3 months after the date on which the dutiable transaction occurs.

16   Lodging written instrument or written statement with Chief Commissioner

(1)  A transferee who is liable to pay duty in respect of a dutiable transaction must, within 3 months after the liability arises, lodge with the Chief Commissioner:
(a)  the written instrument that effects the dutiable transaction or, if there is more than one such written instrument, each one of them as provided by section 18 (1), or
(b)  the written statement made in compliance with section 15.
(2)  (Repealed)

17   When must duty be paid?

(1)  A tax default does not occur for the purposes of the Taxation Administration Act 1996 if duty is paid within 3 months after the liability to pay the duty arises.
(2)  (Repealed)

18   No double duty

(1)  If a dutiable transaction is effected by more than one instrument, one instrument is to be stamped with the duty payable on the dutiable transaction and each other instrument is chargeable with duty of $50.
Note. Instrument includes a written statement.
(2)  The duty chargeable in respect of a transfer of dutiable property made in conformity with an agreement for the sale or transfer of the dutiable property is $10 if the duty chargeable in respect of the agreement has been paid.
(3)  The duty chargeable in respect of a transfer of dutiable property that is not made in conformity with an agreement for the sale or transfer of the dutiable property is $10 if:
(a)  the duty chargeable in respect of the agreement has been paid, and
(b)  the transfer would be in conformity with the agreement if the transferee was the purchaser under the agreement, and
(c)  the transfer occurs at the same time as, or proximately with, the completion or settlement of the agreement, and
(d)  at the time the agreement was entered into, and at the completion or settlement of the agreement:
(i)  the purchaser under the agreement and the transferee under the transfer are related persons, except as provided by subparagraph (ii), or
(ii)  if the purchaser purchased as a trustee, the transferee and the beneficiary are related persons.
Note. Section 64C also provides for a duty concession in respect of a transfer of dutiable property that is made in partial conformity with an agreement for the sale or transfer of the property. The concession applies if the interest in the property transferred to the transferee is not identical to the interest agreed to be transferred to the transferee under the agreement.
(4)  The duty chargeable on a transfer to a trustee of dutiable property subject to a declaration of trust is $10 if ad valorem duty has been paid on the declaration of trust in respect of the same dutiable property.
(5)  The duty chargeable on a transfer of dutiable property as a consequence of a foreclosure order is $10 if ad valorem duty has been paid on the foreclosure.
(6)  The duty chargeable on a declaration of trust that declares the same trusts as those upon and subject to which the same dutiable property was transferred to the person declaring the trust is $10 if ad valorem duty has been paid on the transfer.
(6A)  The duty chargeable on a declaration of trust is $50 if the Chief Commissioner is satisfied that:
(a)  the declaration of trust supersedes another declaration of trust in respect of which duty has been paid and declares the same trusts as were declared under the superseded declaration of trust, and
(b)  the beneficiary under the declaration of trust is the same as under the superseded declaration of trust, and
(c)  the dutiable property subject to the declaration of trust:
(i)  is wholly or substantially the same as the property that was the subject of the superseded declaration of trust at the time of the declaration of the superseded declaration of trust, or
(ii)  represents the proceeds of re-investment of property that was the subject of the superseded declaration of trust at the time of the declaration of the superseded declaration of trust, or
(iii)  is property to which both subparagraphs (i) and (ii) apply.
(7)  A dutiable transaction in respect of marketable securities that confer a land use entitlement is taken to be a dutiable transaction in respect of the land use entitlement only. If duty has been paid on the dutiable transaction in accordance with a law of another Australian jurisdiction, the duty charged by this Chapter on the dutiable transaction is to be reduced by the amount of the duty so paid.
(8)  Despite subsection (1), if a single dutiable transaction is effected by more than one electronic registry instrument it is sufficient that one of those instruments is duly stamped with the duty chargeable on the dutiable transaction.
Note. See section 290.

19   What is the rate of duty?

Duty is charged on the dutiable value of the dutiable property subject to the dutiable transaction at the relevant rate set out in Part 3.

20   Concessions and exemptions from duty

Concessions and exemptions from duty charged by this Chapter are dealt with in Parts 6, 7 and 8.
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