Recent Duty Changes: SA, WA, NSW, QLD, and Vic

There has been a flurry of recent amendments and proposed amendments to the duties regime in various states. Changes have related to:

  • in NSW — replacing "land rich duty" with "landholder duty" and a u-turn on abolishing mortgage duty;
  • in Queensland — clarifying duty on trust amendments, acquisitions and surrenders;
  • in SA — clarifying the abolition of duty on mortgages and sales of rental businesses;
  • in WA — clarifying duty on grant of leases; and
  • in Victoria — imposing duty on leases for which a premium is paid and reducing lodgement periods.


New South Wales

"Land rich duty" becomes "landholder duty"

From 1 July 2009, NSW "land rich duty" will be replaced by "landholder duty", a concept which is currently used in WA, the ACT and Queensland. The introduction of "landholder duty" will substantially alter how, and whether, duty is payable on indirect acquisitions of NSW land.

Currently, duty is payable at conveyancing rates (up to 5.5%) if a person acquires at least 20% of the units in a private unit trust, or at least 50% of the shares in a company, that either directly or indirectly:

  • holds land in NSW with a total unencumbered value of $2 million or more; and
  • holds at least 60% of its total assets as land (regardless of where the land is).

Ratio test removed

Under the new "landholder duty" concept the 60% ratio of land to total assets requirement will be removed and acquisitions of indirect interests in land which were previously exempt from duty (due to the 60% ratio test) will, from 1 July 2009, be dutiable at conveyancing rates.

"Land rich duty" becomes "landholder duty"

Although the NSW government had announced 1 July 2009 as the date it would abolish mortgage duty, the date has now moved to 1 July 2012. Until then, the rate of duty chargeable on mortgages remains 0.4% of the amount secured.


A reintroduced Bill in Victoria proposes to amend the Victorian duties legislation in two respects.

Leases with premiums

At the moment, duty is only payable on leases in Victoria in exceptional circumstances — for example, when a lease is granted for a premium and an agreement exists for the future transfer of the land subject to the lease.

The Bill proposes to impose duty on leases at conveyancing rates (up to 5.5%) in the following 3 circumstances:

  1. new lease with premium: the grant of a lease for which any consideration other than market rent is paid or agreed to be paid, either in respect of the lease or in respect of other rights, options or arrangements;
  2. transferred lease for premium: the transfer or assignment of any lease for which any consideration other than rent reserved is paid or agreed to be paid, either in respect of the lease itself or in respect of other rights, options or arrangements; and
  3. surrendering leases for premium: the surrender of any lease which embodies a premium.

These amendments are not intended to apply:

  • to normal commercial leases for which market rent is payable and no premium is involved; or
  • leases in respect of retirement villages.

If passed, the Bill will apply retrospectively from 21 November 2008. In view of this, grants of leases made on or about 28 November 2008 should be reviewed carefully to ensure they do not contravene the proposed amendments.

Reduction in time for lodgement

Currently, documents and transactions that are liable for duty in Victoria must be lodged for assessment with the Victorian State Revenue Office within 90 days. The Bill proposes to reduce this timeframe to 14 days. No other State or Territory in Australia maintains such a short lodgement/payment rule. The new rule will take effect when the Bill is passed.

(It is likely that the Bill will be amended to extend the lodgement timeframe to 30 days. Amendments to the Bill are expected to be formally debated in early May 2009.)


A variation to a trust deed will be subject to duty at conveyancing rates (up to 5.25%) in Queensland if the variation amounts to an acquisition or surrender of a trust interest. An acquisition or surrender of a trust interest will occur if the person becomes or ceases to be a beneficiary of a trust that:

  • holds dutiable property; or
  • has an indirect interest in dutiable property.

However, a variation will not amount to an acquisition or surrender of a trust interest if the following conditions are met:

  • the trust does not hold dutiable property;
  • the trust does not have an indirect interest in dutiable property; or
  • the variation is administrative in nature (for example, the variation is to rules, standard conditions and general clauses).

From 1 May 2009:

  • variation of trust instruments that do not amount to an acquisition or surrender of trust interest will no longer be required to be lodged with the OSR for endorsement; and
  • variations which meet one of the above conditions may be lodged directly with the Titles Office without endorsement.

South Australia

From 1 July 2009, in SA, stamp duty will be abolished:

  • on mortgages; and
  • on amounts received in respect of the sale and purchase of rental businesses.

The relevant bill was introduced into the SA House of Assembly on 8 April 2009 to clarify the stamp duty treatment of rental contracts and mortgages entered into both before and after 1 July 2009. The proposed amendments confirm that:

  • no refund of duty is available for amounts in respect of a rental business if the amount is received before 1 July 2009 merely because the contract under which the amount was received expires on or after 1 July 2009; and
  • duty on a mortgage executed before 1 July 2009, but lodged with the SA Revenue Office on or after 1 July 2009, will be calculated according to the rates applying on the date the mortgage was executed.

Western Australia

The Duties Act 2008 (WA) came into effect on 1 July 2008. The Act imposes duty on, among other things, the grant of a lease at rates of up to 5.15%. The amount of duty payable on a grant of a lease in Western Australia is based on:

  • the amount of any consideration for the grant of the lease; plus
  • any amount paid, or payable, under the lease as rent that:
    • exceeds the fair market rent for the leased property; and
    • represents an amount paid or payable for the grant of the lease.

The Duties Regulations 2008 (WA) have been amended to provide that, in determining the amount of consideration for the grant of a lease, the value of any substantial improvement of, or addition to, the leased property carried out by the tenant is disregarded. The amendment applies to all leases granted on or after 1 July 2008.

Questions & more information

For questions or more information about the above article, please call Maddocks in Melbourne (03 9288 0555) and ask for a member of the Maddocks Tax and Revenue Team.