Duties Act 1997 No 123
Historical version for 1 January 2012 to 5 January 2012 (accessed 19 December 2014 at 00:28) Current version
Chapter 7

Chapter 7 Mortgages

Part 1 Introduction and overview

203A   Abolition of mortgage duty—effective 1 July 2012

(1)  Mortgage duty is abolished on and from 1 July 2012.
(2)  However, mortgage duty remains chargeable, and this Chapter continues to apply, in respect of the following:
(a)  a mortgage first executed before 1 July 2012 (including any advances or further advances made in respect of the mortgage before that date),
(b)  an instrument of security referred to in section 208 (3) that first affects land in New South Wales before 1 July 2012,
(c)  an instrument of security referred to in section 208 (3A) that first affects relevant property in New South Wales before 1 July 2012,
(d)  an instrument that first becomes a mortgage or evidences the terms of a mortgage, as referred to in section 208 (4), before 1 July 2012.
(3)  A mortgage does not become liable to the additional duty referred to in section 208 (2) in respect of an advance or further advance that is made on or after 1 July 2012 (even if the mortgage was first executed before that date).

204   Imposition of duty

This Chapter charges duty on instruments that fall within the definition of a mortgage. Duty chargeable under this Chapter is called mortgage duty.
Notes. 

(1)   Mortgage duty is calculated, in most cases, according to “the amount secured by the mortgage”. Contingent liabilities may also be included. This is dealt with in Part 2.

(2)   Ad valorem duty is only chargeable on one of a package of mortgages securing the same advance. This is dealt with in section 214.

(3)   Provision is also made for the apportionment, for duty purposes, of the amount secured by any mortgage over property in different Australian jurisdictions. This is dealt with in section 216.

205   What is a mortgage?

For the purposes of this Chapter, an instrument is a mortgage if it is:
(a)  a security by way of mortgage or charge over property wholly or partly in New South Wales at the liability date, or
(b)  (Repealed)
(c)  a security by way of a transfer or conveyance of any property in New South Wales 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
(d)  an instrument that, on the deposit of documents of title to property in New South Wales or instruments creating a charge on property in New South Wales, becomes a mortgage or evidences the terms of a mortgage.
Note. Certain instruments that would otherwise be caught by this definition are exempted under Part 4.

206   What is an advance?

In this Chapter, advance means the provision or obtaining of funds by way of financial accommodation, by means of:
(a)  a loan, being:
(i)  an advance of money, or
(ii)  the payment of money for or on account of, or on behalf of, or at the request of, any person, or
(iii)  a forbearance to require the payment of money owing on any account whatever, or
(iv)  any transaction (whatever its terms or form) that in substance effects a loan of money, or
(b)  a bill facility, being one or more agreements, understandings or arrangements as a consequence of which a bill of exchange or promissory note:
(i)  is drawn, accepted, endorsed or made, and
(ii)  is held, negotiated or discounted to obtain funds,
whether or not the funds are obtained from the person who draws, accepts, endorses or makes the bill of exchange or promissory note and whether or not the funds are obtained from a person who is a party to any such agreement,
and includes contingent liabilities of the kind referred to in section 215.

207   Who is liable to pay the duty?

The person liable to pay mortgage duty is the mortgagor or the person bound.

208   When does a liability arise?

(1)  A mortgage becomes liable to duty on the date of its first execution.
(2)  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 this Act.
Note. Section 219 exempts some further advances from duty.
(3)  An instrument of security that does not affect property in New South Wales at the date of first execution but that affects land in New South Wales 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.
(3A)  An instrument of security that does not affect property in New South Wales at the date of first execution but that, at any time after execution, affects relevant property in New South Wales 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.
(4)  An instrument that, on the deposit of documents of title to property in New South Wales or instruments creating a charge on property in New South Wales, 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.
(5)  A reference in subsection (3) to land does not include a reference to an interest in land that is held by way of security.
(6)  For the purposes of this section, relevant property means any property, excluding land and the following kinds of property:
(a)  a marketable security that is quoted on the Australian Stock Exchange,
(b)  an interest in a marketable security referred to in paragraph (a), or an interest in a marketable security if the interest is quoted on the Australian Stock Exchange,
(c)  an interest in a unit trust scheme, being a unit trust scheme in respect of which units in the scheme have been issued to the public and 50 or more persons are beneficially entitled to units in the scheme,
(d)  property the Chief Commissioner is satisfied is of a similar nature to property referred to in paragraph (a), (b) or (c).

209   When must duty be paid?

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.

210   How is mortgage duty charged?

(1)  The amount of duty chargeable on a mortgage is calculated by reference to the amount secured by it at the liability date, as determined under Part 2.
(2)  The amount of duty is:
(a)  $5.00, if no amount is secured by the mortgage or the amount secured by the mortgage is not more than $16,000, or
(b)  if the amount secured by the mortgage is more than $16,000—$5.00, plus a further $4.00 for every $1,000, or part, by which the amount secured exceeds $16,000.
(3)  The amount of duty chargeable on the mortgage at a liability date is to be reduced by the amount of ad valorem duty (if any) for which the mortgage has already been duly stamped under this Act.
(4)  No refund of duty is payable because the amount of ad valorem duty for which a mortgage has already been duly stamped under this Act exceeds the duty chargeable under subsection (2) on the amount secured by the mortgage at a liability date.

211   Consequences of non-payment of duty

A mortgage on which duty is required by this Chapter to be paid is unenforceable to the extent of any amount secured by the mortgage on which duty has not been paid.

212   Where is property located?

(1)  For the purposes of this Chapter, property in the following forms is taken to be located in the place specified:
(a)  shares in or securities of a body corporate:
(i)  in the case of a company within the meaning of the Corporations Act 2001 of the Commonwealth—in the place where the company is taken to be registered for the purposes of that Act, or
(ii)  in any other case—in the place of incorporation of the body corporate,
(b)  units in a unit trust scheme:
(i)  in the place where the register on which the units are registered is kept, or
(ii)  in the place of residence of the manager of the unit trust scheme, if the register on which the units are registered is not kept in Australia,
(c)  debt securities of a Government of a State or Territory of the Commonwealth—in the State or Territory concerned.
(2)  Subsection (1) (a) is declared to be a Corporations legislation displacement provision for the purposes of section 5G of the Corporations Act 2001 of the Commonwealth in relation to section 1070A (4) of that Act.

Part 2 Calculating the amount secured by a mortgage

213   Amount secured by mortgage

(1)  For the purposes of this Chapter, the amount secured by a mortgage is the amount of any advances made under an agreement, understanding or arrangement for which the mortgage is security (even if the amount of advances made exceeds the amount of advances recoverable under the mortgage).
(2)  A reference in this Chapter to an advance secured by or made under a mortgage includes a reference to any advance made under an agreement, understanding or arrangement for which the mortgage is security (whether or not the advance is recoverable under the mortgage).
(3)  To avoid doubt, an advance made under an agreement, understanding or arrangement includes any advance made as a consequence of a variation to that agreement, understanding or arrangement.

214   Mortgage packages

(1)  The Chief Commissioner must, at the liability date for a mortgage, assess the mortgage, together with any other instruments of security, as a mortgage package if the mortgage and other instruments secure or partly secure the same money.
(2)  This section applies regardless of when the other instruments of security were first executed.
(3)  Duty on a mortgage package is to be assessed under this Part as if the instruments comprising the mortgage package, to the extent that they secure the same moneys, were a single mortgage.
(4)  One of the mortgages in the mortgage package is to be stamped, or upstamped, with any ad valorem duty paid under this Act for the mortgage package and each other mortgage in the mortgage package is to be stamped as a collateral mortgage.
(5)  If any of the mortgages in the mortgage package partly secures other moneys, that mortgage is to continue to be treated as a separate mortgage under this Chapter in respect of the other moneys that it secures and may be stamped for the duty chargeable in respect of those other moneys.

215   Contingent liabilities

(1)  A mortgage that is used or is capable of being used (whether directly or through a chain of relationships) to recover the whole or any part of an amount contingently payable in connection with an advance:
(a)  by a guarantor or indemnifying party under a guarantee or indemnity, or
(b)  by another party under another instrument of a different kind,
is liable to duty as if the amount of the contingent liability under the guarantee, indemnity or other instrument (or, where there is more than one guarantee, indemnity or other instrument, the greatest contingent liability) were a separate advance made under the agreement, understanding or arrangement for which the mortgage is security.
(2)  In the case of a mortgage that is part of a chain of relationships referred to in subsection (1), a reference in that subsection to a contingent liability is a reference to a contingent liability limited to the amount of any advance by any party in the chain, and does not include a reference to any other kind of contingent liability.
(3)  This section does not apply if the Chief Commissioner is satisfied that there is no connection between the mortgage and any advance by any party to the arrangements.
(4)  Nothing in this section requires duty to be paid more than once in respect of an advance.

216   Mortgages over property not wholly within New South Wales

(1)  Mortgage duty is to be assessed for a mortgage over property that is partly within and partly outside New South Wales as if the amount secured by the mortgage were only the dutiable proportion.
(2)  The dutiable proportion is to be calculated in accordance with the following formula:


where:

DP is the dutiable proportion.

AS is the amount secured by the mortgage on which duty would, but for this section, be charged at the liability date.

V is the value of the property in New South Wales affected by the mortgage.

T is the value of all property affected by the mortgage.

(3)  The dutiable proportion is to be calculated by reference to any relevant document that provides, or relevant documents that together provide, the value of all property affected by the mortgage, subject to this section.
(4)  A relevant document is any of the following prepared within 12 months before the liability date for the mortgage:
(a)  an independent valuation of the secured property,
(b)  a statement of the mortgagee based on information obtained by the mortgagee in deciding to make the advance to the mortgagor,
(c)  property valuations used by the mortgagor in preparing an annual return to be lodged under the Corporations Act 2001 of the Commonwealth,
(d)  a financial report of the mortgagor or a group of which the mortgagor is a member, certified by an independent auditor as presenting a true and fair view of a corporation’s or group’s financial position,
(e)  agreed property valuations that form the basis of the mortgagor’s insurance policies,
(f)  another document the Chief Commissioner considers to be appropriate for calculating the dutiable proportion.
(5)  If more than one relevant document is available for determining the value of the same property, the Chief Commissioner is to give preference to the most recently prepared document, subject to this section.
(6)  If a mortgagor is a member of a group, and a financial report comprising the consolidated accounts of the group is available, and is a relevant document, the dutiable proportion is to be calculated primarily by reference to that relevant document, unless the Chief Commissioner does not consider it appropriate to do so. In such a case, the only debt or equity to be taken into account in calculating the dutiable proportion is the debt and equity as disclosed in that financial report.
(7)  (Repealed)

216A   Calculation of dutiable proportion—goodwill and intellectual property

For the purposes of this Chapter, if the property secured by a mortgage includes the goodwill of a business or intellectual property, the goodwill or intellectual property is taken to be property in New South Wales to the extent that it would have comprised a business asset under Chapter 2 if it had been transferred to the mortgagor immediately before the liability date, which has a value equivalent to the dutiable value of such a transfer.

217   Collateral mortgages—minimum duty

A collateral mortgage is chargeable with a minimum duty of $50.

217A, 218   (Repealed)

218A   Security

(1)  A stamped mortgage or a collateral mortgage that was, but is no longer, part of the same mortgage package and no longer secures the same money secured by that package is not security for any other advance unless duty in respect of the other advance has been paid.
(2)  The withdrawal of a mortgage from a mortgage package will not, for the purposes of this Chapter, affect the amount for which the remaining mortgage or mortgages are security.

218B, 218BA   (Repealed)

218C   Multi-jurisdictional statement

(1)  If mortgage duty is imposed on the dutiable proportion of a mortgage (whether for a mortgage over property not wholly in New South Wales, a mortgage package or on initial or subsequent advances), the mortgagor and mortgagee must, within 3 months after the liability arises:
(a)  make a written statement, in an approved form, about the location and value of the secured property, and
(b)  lodge the statement with the Chief Commissioner.

Maximum penalty: 100 penalty units.

(2)  The making and lodging of a statement under subsection (1) by either the mortgagor or the mortgagee relieves the other person from complying with that subsection.
(3)  The statement may be taken to be the mortgage, or mortgages comprising the mortgage package.

Part 3 Duty concessions

218D   Concession for advances charged with duty under corresponding Acts

(1)  If the total of the amount of ad valorem duty chargeable under this Act in respect of the amount secured by a mortgage at a liability date and the amount of duty paid under a corresponding Act in respect of the mortgage exceeds the maximum duty charge in respect of the mortgage, the amount of ad valorem duty chargeable on the mortgage at the liability date is to be reduced by the amount necessary to ensure that the maximum duty charge is not exceeded.
(2)  The maximum duty charge in respect of the mortgage is the amount of ad valorem duty that would be chargeable in respect of the amount secured by the mortgage at the liability date if:
(a)  it were a single mortgage over property wholly within New South Wales (that is, disregarding section 216), and
(b)  it had not previously been stamped under this Act for any ad valorem duty.
(3)  The amount of duty paid under a corresponding Act in respect of the mortgage is the total of all ad valorem duty already paid in respect of the amount secured by the mortgage under any corresponding Act.
(4)  If a mortgage has already been duly stamped under this Act for an amount of duty, any reduction in the amount of duty chargeable on the mortgage at the liability date that is made under section 210 (3) is to be made after making any reduction required by this section.
(5)  To avoid doubt, this section extends to a mortgage package assessed as a single mortgage.

219   Additional advances of not more than $10,000 in 12 months

Duty is not chargeable on additional advances secured by or under a mortgage if the total of the additional advances so secured does not exceed $10,000 in any 12-month period, not being the period of 12 months following the making of the initial advance.

220   Refinancing of loans

(1)  In this section:

land used for aquaculture means land subject to an aquaculture permit (within the meaning of the Fisheries Management Act 1994).

refinancing mortgage means a mortgage that:

(a)  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, and
(b)  is created to secure an advance to the same borrower as under the earlier mortgage, and
(c)  is over the same or substantially the same property or part of the property as the earlier mortgage.

(2)  For the purposes of subsection (1), 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.
(3)  A refinancing mortgage is taken to have been stamped with ad valorem duty as a mortgage in respect of the duty-free refinancing amount, except as provided by subsection (5).
(3A)  For the purposes of this section, the duty-free refinancing amount is the lesser of the following amounts:
(a)  the amount secured by the earlier mortgage on which duty has been paid under this Act or in relation to which an exemption from duty has been obtained,
(b)  $1,000,000.
(3B)  However, if the refinancing mortgage is over land used for primary production or land used for aquaculture, the duty-free refinancing amount is the maximum amount payable under or secured by the earlier mortgage (being an amount in relation to which mortgage duty has been paid or in relation to which an exemption from duty has been obtained).
Note. “Land used for primary production” is defined in the Dictionary.
(4)  If an advance is refinanced by more than one lender, so that mortgages given to the lenders together secure the balance outstanding under an earlier mortgage, the definition of refinancing mortgage in subsection (1) is to be construed as though:
(a)  the reference to a mortgage securing the outstanding balance were a reference to the aggregate of such mortgages, and
(b)  the reference to property were a reference to the property securing the aggregate of refinancing advances made by the lenders under their combined mortgages, to the intent that, if the requirements of the definition, as so construed, are satisfied, each lender is taken, for the purposes of this section, to be the holder of a refinancing mortgage.
(5)  If, as provided by subsection (4), each of a number of lenders is the holder of a refinancing mortgage, a refinancing mortgage held by each lender is taken to have been duly stamped with ad valorem duty as a mortgage in respect of an amount equal to the same proportion of the duty-free refinancing amount as the amount secured by that mortgage bears to the total amount secured by the refinancing mortgages held by all the lenders.
(6)  If each of two or more refinancing mortgages severally secures the same advance:
(a)  the provisions of subsection (3) or (5), as the case may be, apply to such one of the mortgages as the Chief Commissioner determines, and
(b)  no duty is chargeable in respect of any of the others.
(7)  (Repealed)
(8)  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 refinancing mortgage (not being a mortgage on which, by virtue of subsection (6) (b), no duty is chargeable) exceeds:
(a)  the duty-free refinancing amount, or
(b)  the proportion of that amount referred to in subsection (5), in the case of a refinancing to which subsection (4) applies.
(8A)  If a borrower is a related body corporate of a borrower under an earlier mortgage, the firstmentioned borrower is taken to be the same borrower or the same person for the purposes of subsection (1) or (2).
(9)  If a borrower under an earlier mortgage dies, or is a party to a marriage that has been dissolved or annulled or, in the opinion of the Chief Commissioner, has broken down irretrievably or is party to a de facto relationship that, in the opinion of the Chief Commissioner, has been terminated, the remaining borrower is, or the remaining borrowers are, taken to be the same borrower or the same person for the purposes of subsection (1) or (2).
(10)  A party to a marriage or de facto relationship may provide a statement to the Chief Commissioner, in the form of a statutory declaration, to the effect that:
(a)  in the case of a marriage:
(i)  the party intends to apply for a dissolution or an annulment of the marriage, or
(ii)  the parties to the marriage have separated, and there is no reasonable likelihood of cohabitation being resumed, or
(b)  in the case of a de facto relationship, the de facto relationship has been terminated.

The Chief Commissioner is required to have regard to any such statement in exercising his or her functions under subsection (9).

(11)  Subsection (10) does not limit the functions of the Chief Commissioner under section 72 of the Taxation Administration Act 1996.

221   (Repealed)

Part 3A Exemptions for mortgages associated with housing

221A   Definitions

In this Part:

alterations or additions, in relation to a private dwelling house, includes:

(a)  any improvements to the parcel of land on which the dwelling house is constructed, and
(b)  the maintenance, repair or renovation of the dwelling house or of an improvement referred to in paragraph (a).

APRA reporting standard means a reporting standard determined by the Australian Prudential Regulation Authority under section 13 of the Financial Sector (Collection of Data) Act 2001 of the Commonwealth.

private dwelling house includes:

(a)  a lot within the meaning of the Strata Schemes Management Act 1996, and
(b)  a land use entitlement that confers a right to occupy a private dwelling house.

residential land means a parcel of vacant land that is zoned or otherwise designated for use under an environmental planning instrument (within the meaning of the Environmental Planning and Assessment Act 1979) for residential or principally for residential purposes.

221B   Mortgages associated with owner occupied housing

(1)  Mortgage duty is not chargeable in respect of a mortgage if the mortgage secures an advance or advances made for the purpose of owner occupied housing and no other advances.
(2)  If a mortgage secures an advance made for the purpose of owner occupied housing and another advance that is not made for that purpose, mortgage duty is not chargeable in respect of the mortgage in relation to the amount advanced for the purpose of owner occupied housing.
(3)  This section applies in respect of a mortgage only if the borrower under the mortgage is a natural person or, if there is more than one borrower, each of them is a natural person.
(4)  An advance is made for the purpose of owner occupied housing if it is to be applied wholly or predominantly for one or more of the following purposes:
(a)  financing the acquisition of a residence,
(b)  financing the construction of a residence,
(c)  financing alterations or additions to a residence,
(d)  financing the acquisition of residential land,
(e)  repaying another advance, if the advance to be repaid was made for the purpose of owner occupied housing (within the meaning of this section).
(5)  For the purposes of this section, a residence is a private dwelling house that is used and occupied or intended to be used and occupied by the borrower, or by any of the borrowers, as a place of residence.
(6)  To avoid doubt, an exemption provided for by this section is not available in respect of any advance that is to be applied wholly or predominantly for business or investment purposes (or both).
(7)  The Chief Commissioner may, by written instrument, determine the criteria that may be applied by lenders for the purpose of establishing that the exemption provided for by this section applies in respect of an advance.
(8)  Without limiting subsection (7), the Chief Commissioner may determine that an advance is taken to be made for the purpose of owner occupied housing if it meets criteria set out in any APRA reporting standard relating to housing finance that is specified by the Chief Commissioner to be applicable to the exemption under this section.
(9)  A determination made by the Chief Commissioner under this section:
(a)  may be varied or revoked by the making of a further determination, and
(b)  has effect according to its tenor.
(10)  The exemption provided for by this section takes effect on and from 1 September 2007.

221C   Mortgages associated with investment housing

(1)  Mortgage duty is not chargeable in respect of a mortgage if the mortgage secures an advance or advances made for the purpose of investment housing and no other advances.
(2)  If a mortgage secures an advance made for the purpose of investment housing and another advance that is not made for that purpose, mortgage duty is not chargeable in respect of the mortgage in relation to the amount advanced for the purpose of investment housing.
(3)  This section applies in respect of a mortgage only if the borrower under the mortgage is a natural person or, if there is more than one borrower, each of them is a natural person.
(4)  An advance is made for the purpose of investment housing if it is to be applied wholly or predominantly for one or more of the following purposes:
(a)  financing the acquisition of investment housing,
(b)  financing the construction of investment housing,
(c)  financing alterations or additions to investment housing,
(d)  repaying another advance, if the advance to be repaid was made for the purposes of investment housing (within the meaning of this section).
(5)  For the purposes of this section, investment housing is any private dwelling house that is used, or is intended to be used or sold, for investment or business purposes (or both) by the borrower or by any of the borrowers.
(6)  The Chief Commissioner may, by written instrument, determine the criteria that may be applied by lenders for the purpose of establishing that the exemption provided for by this section applies in respect of an advance.
(7)  Without limiting subsection (6), the Chief Commissioner may determine that an advance is taken to be made for the purpose of investment housing if it meets criteria set out in any APRA reporting standard relating to personal or commercial finance that is specified by the Chief Commissioner to be applicable to the exemption under this section.
(8)  A determination made by the Chief Commissioner under this section:
(a)  may be varied or revoked by the making of a further determination, and
(b)  has effect according to its tenor.
(9)  The exemption provided for by this section takes effect on and from 1 July 2008.

Part 4 Other exemptions

222   Exempt mortgages and supporting instruments

(1)  This Chapter does not apply to a mortgage executed before 1 January 1975.
(2)  Other instruments that are exempt from payment of mortgage duty are:
(a)  a mortgage created solely for the purpose of providing security in accordance with a condition imposed on the grant of bail in criminal proceedings, and
(b)  a mortgage taken by a non-profit organisation in conjunction with a lease in respect of which no duty is chargeable under this Act, and
(c)  a mortgage of any ship or vessel, or of any part, interest, share or property of or in any ship or vessel, and
(d)  a mortgage given by the Government of the Commonwealth or the Government of New South Wales or by any public statutory body constituted under a law of this State, and
(e)  (Repealed)
(f)  a mortgage under the Liens on Crops and Wool and Stock Mortgages Act 1898, and
(f1)  an agricultural goods mortgage under the Security Interests in Goods Act 2005, and
(g)  a mortgage that secures an amount advanced by an employer or a related body corporate of an employer to an employee of the employer, for the purpose of financing a purchase by the employee of shares in the employer, or a related body corporate of the employer, if the amount advanced (and the total of all advances that the mortgage secures) does not exceed $16,000.
(3)  The exemption provided by subsection (2) (d) does not apply to a mortgage given by a public statutory body in relation to a transaction, or any one of a class of transactions, specified in a proclamation made by the Governor and published in the Gazette in respect of the public statutory body concerned.
(4)  Duty is not chargeable in respect of a mortgage made or given by:
(a)  a council or county council under the Local Government Act 1993, or
(b)  the WorkCover Authority.
(5)  Duty is not chargeable on an instrument referred to in section 205 (d) if it is executed for the purposes of money market trading operations conducted or to be conducted by the person executing the instrument.
(6)  Duty is not chargeable in respect of a mortgage:
(a)  that is taken or is to be taken by the Sydney Futures Exchange Clearing House or the Options Clearing House Pty. Limited, and
(b)  that is or will be made available to it by a clearing member of the market, and
(c)  that does not secure an advance.
(7)  Duty under this Chapter is not chargeable on a charge over land that is created under an agreement for the sale or transfer of the land if any part of the deposit or balance of the purchase price for the land is paid to the vendor (or as the vendor directs) before completion of the sale or transfer.

223   Mortgages associated with certain credit contracts

(1)  If:
(a)  a mortgage secures an amount advanced under a credit contract and no other advance, and
(b)  the total amount advanced under the credit contract does not exceed $35,000,
mortgage duty is not chargeable in respect of the mortgage.
(2)  If:
(a)  a mortgage secures an amount advanced under a credit contract and another advance, and
(b)  the total amount advanced under the credit contract does not exceed $35,000,
mortgage duty is not chargeable on the mortgage in relation to the amount advanced under the credit contract.
(3)  If:
(a)  a mortgage secures an amount advanced under a credit contract (whether or not it also secures any other advance), and
(b)  the total amount advanced under the credit contract exceeds $35,000,
the whole of the amount advanced under the credit contract comprises or forms part of the advances secured by the mortgage.
(4)  (Repealed)
(5)  In this section:

credit contract means a credit contract within the meaning of the National Credit Code as set out in Schedule 1 to the National Consumer Credit Protection Act 2009 of the Commonwealth.

224   Farm machinery and commercial vehicles

(1)  Mortgage duty is not chargeable on so much of an advance to a natural person or a strata corporation for the acquisition of farm machinery or a commercial vehicle as is secured by the mortgage.
(2)  In this section:

commercial vehicle means:

(a)  a motor vehicle or trailer within the meaning of the Road Transport (Vehicle Registration) Act 1997 constructed or adapted principally for the carriage of goods but does not include a motor vehicle of the kind known as a utility, a station wagon or a panel van, or
(b)  a vehicle without motive power of its own and constructed or adapted principally for the carriage of goods and for being drawn by a motor vehicle within the meaning of that Act.

farm machinery means:

(a)  a harvester, binder, tractor, plough or other agricultural implement, or
(b)  a boat within the meaning of the Fisheries Management Act 1994 or fishing gear within the meaning of that Act, or
(c)  any other goods of a class commonly used for the purposes of a farming undertaking that are determined by the Chief Commissioner to be farm machinery for the purposes of this section,
where the goods are acquired for the purposes of a farming undertaking.

farming undertaking includes:

(a)  any agricultural, apicultural, dairy farming, horticultural, orcharding, pastoral, poultry keeping, viticultural or other business involving the cultivation of the soil, the gathering of crops or the rearing of livestock, and
(b)  the business of taking fish, crustacea, oysters or any other marine, estuarine or fresh-water animal life, and
(c)  the cutting of timber for sale, and
(d)  any class of business determined by the Chief Commissioner to be a farming undertaking.

225   Certain debentures and related instruments

(1)  Mortgage duty is not chargeable on a mortgage solely securing the repayment of advances arising from the issue by a financial corporation or a related corporation of a debenture.
(2)  Mortgage duty is not chargeable on a mortgage in respect of advances arising from the issue by a financial corporation or a related corporation of a debenture if the mortgage secures in part the repayment of those advances.
(3)  This section applies to a debenture issued, or a mortgage executed, by a related corporation only in so far as the debenture is issued, or the mortgage is executed, for the purposes of raising funds to be used for a financial corporation.
(4)  In this section:

financial corporation means a corporation whose sole or principal business is providing finance to the public, including making loans to the public.

related corporation, in relation to a particular financial corporation, means a corporation that is, with respect to the financial corporation, a related body corporate within the meaning of the Corporations Act 2001 of the Commonwealth.

Part 5 Miscellaneous

226   Payment on mortgages associated with debenture issues

(1)  This section applies if:
(a)  a corporation is or will be under a liability to repay money received or to be received by it in respect of its debentures, and
(b)  the repayment is secured by a mortgage first executed before the cut-off date, and
(c)  the corporation is a party to an instrument of trust relating to the debentures.
(2)  If the corporation and the trustee for the debenture holders give a written undertaking in the approved form to the Chief Commissioner:
(a)  a mortgage first executed by the corporation before the cut-off date and solely securing the repayment of money received or to be received by the corporation in respect of its debentures is not liable to mortgage duty in respect of advances made before the debenture concession closure date arising from debentures subscribed for before the cut-off date, and
(b)  a mortgage, not executed by the corporation, and first executed before the cut-off date, solely securing the repayment of such money is liable to duty of $10 in respect of advances made before the debenture concession closure date arising from debentures subscribed for before the cut-off date, and
(c)  a mortgage, whether executed by the corporation or by another party, and first executed before the cut-off date, and securing in part the repayment of such money is not liable to mortgage duty in respect of advances made before the debenture concession closure date arising from debentures subscribed for before the cut-off date.
Note. The State Revenue Legislation Amendment Act 2003 terminated the concession provided for by this section in respect of mortgages executed, or debentures subscribed for, on or after the cut-off date.
(3)  The undertaking binds the corporation and the trustee to lodge with the Chief Commissioner, in July each year, a statutory declaration setting out, in the following categories, the total amount subscribed for in New South Wales before the cut-off date in respect of the corporation’s debentures during the year ending on the previous 30 June (but not including amounts repayable at call or in less than 30 days) and binds the corporation to pay duty in the following amounts:

Money repayable at or after the expiration of not less than 30 days and not more than 3 months

$2 for every $10,000, or part

Money repayable at or after the expiration of not less than 3 months and not more than 6 months

$2 for every $1,000, or part

Other money (except money repayable at call or in less than 30 days)

$4 for every $1,000, or part

Money repayable at call after a specified period is taken to be money repayable at the expiration of that period.

(3A)  The obligation to lodge a statutory declaration in July each year ceases after July 2003.
(3B)  Section 208 (2) applies in respect of a mortgage referred to in subsection (2), or a collateral mortgage that secures the same money as is secured by a mortgage referred to in subsection (2), if an advance or further advance is made on or after the debenture concession closure date, as if the reference to the amount secured by the mortgage at the time a liability to duty last arose were a reference to the total of:
(a)  the disclosed debenture amount, and
(b)  any advances or further advances made on or after the cut-off date in respect of which duty has been paid under this Chapter.
(3C)  (Repealed)
(3CA)  A mortgage executed before the cut-off date that is not liable to duty under subsection (2) and in respect of which no further advances have been made on or after the debenture concession closure date is taken to have been duly stamped.
(3D)  For the purposes of this section, the disclosed debenture amount is the total amount of debentures subscribed for in New South Wales before the cut-off date and disclosed to the Chief Commissioner in a statutory declaration referred to in subsection (3).
(4)  In this section, a reference to an amount subscribed for in respect of debentures includes a reference to an amount represented by debentures issued on the conversion or renewal of an existing holding of debentures or other marketable securities.
(4A)  To avoid any doubt, subsection (3B) extends to a mortgage executed on or after 1 January 1975 and before 1 January 1999.
(5)  In this section:

cut-off date means the date of commencement of Schedule 1 to the State Revenue Legislation Amendment Act 2003.

debenture concession closure date means the date on which the Bill for the State Revenue Legislation Further Amendment Act 2005 was introduced into the Legislative Assembly.

227   Unregistered mortgages protected by caveats (anti-avoidance provision)

(1)  A caveat under the Real Property Act 1900 in which an estate or interest is claimed under an unregistered mortgage is chargeable with duty.
(2)  The amount of duty is:
(a)  if the mortgage is chargeable, but not stamped, with mortgage duty—the same amount as is chargeable on the mortgage, or
(b)  if the mortgage is stamped, or is not chargeable, with mortgage duty—$50.
(3)  The person liable to pay the duty is the mortgagor.
(4)  This section does not apply to a caveat lodged in respect of a mortgage that is exempt from mortgage duty under Part 4.

227A   Transfer of mortgages

(1)  If a mortgage is transferred (whether or not at the request or direction of any party) to:
(a)  a person who, either in connection with the transfer or at a later time, makes an advance or further advance under or secured by the mortgage, or
(b)  a person who is a party to arrangements (referred to in section 215) relating to such an advance or further advance,
the transferred mortgage is taken, for the purpose of determining its liability to duty under this Act, to be a new mortgage on which no duty has been paid and is liable to duty in respect of the advance or further advance accordingly.
(2)  The date of first execution of the transferred mortgage is taken to be:
(a)  in the case of a mortgage where the advance or further advance was made in connection with the transfer—the date of first execution of the transfer, and
(b)  in the case of a mortgage where the advance or further advance was made at a later time—the date of the first such advance or further advance.
(3)  If an insufficient amount of duty has been paid on a mortgage to which this section applies before it is taken by this section to be a new mortgage, the Chief Commissioner is not prevented from recovering at any time the amount of duty with which, in the Chief Commissioner’s opinion, the mortgage was properly chargeable from the mortgagor or person bound.
(4)  This section does not apply to the following:
(a)  a mortgage referred to in section 220 (3B),
(b)  a transfer of a mortgage by a corporation to another corporation if the Chief Commissioner is satisfied that, had the transfer been a dutiable transaction, it would not be chargeable with duty under section 281 (relating to transfers between members of the same group of corporations),
(c)  a transfer of a mortgage in connection with, or in preparation for creating, issuing, marketing or securing, a mortgage-backed security,
(d)  a transfer of a mortgage from a person who holds the mortgage as trustee for another person to a new trustee appointed in substitution for the former trustee.
(5)  This Chapter applies to a mortgage referred to in subsection (1) in the same way as it applies to any other mortgage, except as provided by subsection (6).
(6)  For the purposes of section 210, a transferred mortgage is not considered to have been duly stamped in respect of any duty paid before the transfer on advances made before the transfer.

228   Stamping counterpart or collateral instrument if mortgage is lost, destroyed or cannot be produced

A counterpart of a mortgage or a collateral security for an amount secured by a mortgage is taken to be the mortgage and may accordingly be stamped or upstamped for mortgage duty purposes if, on application by or on behalf of a person who is a party to the mortgage, the Chief Commissioner is satisfied that the mortgage has been lost or destroyed or, because of being deposited in the Land Titles Office or from other reasonable cause, cannot conveniently be produced.
Top of page