1 July changes to stamp duty

Lisa Lynch, one of our senior tax writers, summarises below recent changes to stamp duty in a number of states.
 

New South Wales

Mortgage duty, share transfer duty and non-real transfer have been abolished from 1 July 2016. The abolition of these duties from 1 July 2016 had been legislated via the State Revenue and Other Legislation Amendment (Budget Measures) Bill 2014 (NSW) that was assented on 24 June 2014.

The State Revenue Legislation Amendment (Budget Measures) Bill 2016 (NSW) received Assent on 28 June 2016. It had passed all stages without amendment and amends the Duties Act 1997 (NSW), the Land Tax Act 1956 (NSW), and the Payroll Tax Rebate Scheme (Jobs Action Plan) Act 2011 (NSW) to implement the NSW Budget 2016 proposals that had not already been legislated. Amendments include:

  • "retargeting" the Jobs Action Plan towards businesses with less than 50 employees, increasing the payroll tax rebate from $5,000 to $6,000 for each additional employee businesses take on. It applies to eligible employment commencing on or after 31 July 2016; and
  • introducing new surcharges for foreign investors in residential real estate. Key points:
    • Foreign investor transfer duty surcharge — From 21 June 2016, a flat transfer duty surcharge of 4% will apply to all acquisitions of NSW residential real estate by foreign persons, including foreign individuals, corporations, trusts and governments.

      The surcharge will not apply to Australian citizens, including those living abroad as well as most permanent residents living in Australia.

      The surcharge will be in addition to normal duty payments on these transactions. Furthermore, the current concession for residential off-the-plan purchases (which allows for a delay of up to 12 months in the payment of duty) will no longer be available to foreign persons.

    • Foreign investor land tax surcharge — Commencing from the 2017 land tax year, a land tax surcharge of 0.75% will apply to holdings of NSW residential land by foreign persons. There will be no tax-free threshold and no principal place of residence exemption for the tax surcharge. The tax surcharge will be additional to normal land tax, which remains unchanged.

Victoria

The State Taxation and Other Acts Amendment Bill 2016 (Vic) received Assent on 28 June 2016. It passed all stages with 12 Government amendments and implements the state taxation measures announced in the 2016-17 Victorian Budget and makes other various minor technical amendments. Some of the key budget changes are as follows:

  • the payroll tax threshold will progressively rise by $25,000 a year over the next 4 financial years. The tax-free threshold will increase to $575,000 on 1 July 2016, to $600,000 on 1 July 2017, to $625,000 on 1 July 2018 and $650,000 on 1 July 2019;
  • a new payroll tax exemption for wages paid or payable to displaced apprentices and trainees will be introduced from 1 July 2016;
  • the foreign purchaser additional duty will increase from 3% to 7%. This will apply to contracts signed on or after 1 July 2016;
  • the land tax surcharge on absentee owners will increase from 0.5% to 1.5% from 1 January 2017; and
  • the land tax exemption for primary production land in an urban zone will be extended to land owned by certain family superannuation trusts from the 2017 land tax year.

The Victorian State Revenue Office (SRO) has prepared a summary of the changes contained in the above Act.

The SRO has updated Duties Form 62 — Purchaser Statement following changes set out in the Act. The purchaser statement is used to identify foreign purchasers of residential property in Victoria. The changes includes clarifying the definition of "residential property" and the definition of transferee in Part A of the form to clarify the relevant types of leases. The updated form can be used immediately but must be used for all transactions and arrangements entered into on or after 1 July 2016, the SRO said.

The SRO has also updated its land tax (stamp duty) calculator to take account of the changes introduced in the Act.

Queensland

The Duties and Other Legislation Amendment Bill 2016 (Qld) received Assent on 27 June 2016. It passed the Qld Parliament without amendment and amends the Duties Act 2001 (Qld) and the First Home Owner Grant Act 2000 (Qld) to implement the following Qld Budget 2016 proposals:

  • Foreign buyers of residential property — introduces a 3% transfer duty surcharge to be applied to foreign purchasers who acquire residential property in Qld from 1 October 2016.
  • First home buyers — a 12-month boost to the Qld First Home Owners' Grant, starting 1 July 2016. Eligible first home buyers will now get $20,000 (instead of $15,000) towards buying or building their new house, unit or townhouse, valued at less than $750,000.
  • Family farm transfers — extends the existing transfer duty concession for interfamilial transfers of family primary production businesses (family primary production business concession) by removing the requirement that the transfer be by way of gift, from 1 July 2016.

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