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.

Note. An offence against subsection (1) committed by a corporation is an executive liability offence attracting executive liability for a director or other person involved in the management of the corporation—see section 121 of the Taxation Administration Act 1996.

(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.