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Abolition of Mortgage and Business Assets Duties from 1 July 2016

As has been long anticipated, from 1 July 2016, Mortgage Duty and Business Assets Duty will be abolished in New South Wales.

Mortgage Duty

Duty on all mortgages is abolished from 1 July 2016. Mortgages executed on or after 1 July 2016 will not be liable to duty. Further advances made on or after 1 July 2016 are also not liable to duty, irrespective of the date of the original mortgage.

Business Assets Duty

The following ceases to be dutiable property from 1 July 2016, provided the transaction is entered into on or after 1 July 2016:

  1. A business asset, being, at any relevant time:
    1. Goodwill, if the business supplied in NSW, or provided services in NSW, to a customer of the business; or
    2. Intellectual property used in NSW; or
    3. A statutory licence or permission under a Commonwealth law if the rights under the licence or permission has been exercised in NSW.
  2. A statutory licence or permission under a NSW law (for example a taxi licence or water access licence).
  3. A gaming machine entitlement within the meaning of the Gaming Machines Act 2001.

Duties to be retained on some business assets

The following types of property remain dutiable property from 1 July 2016:

  1. Land and an interest in land (including a leasehold interest and fixtures).
  2. Goods in NSW (subject to exclusions, such as stock-in-trade, listed in section 11(1)(j) of the Duties Act), if the subject of an arrangement that includes a dutiable transaction over other dutiable property, such as land.

Anti-avoidance measures

Abolition does not apply in respect of a transfer or transaction that occurs on or after 1 July 2016 if it:

  1. Replaces a transfer or transaction involving the same business asset, statutory licence or permission, or gaming machine entitlement that occurred before 1 July 2016; or
  2. Is made or entered into pursuant to an option to purchase the business asset, statutory licence or permission, or gaming machine entitlement that was granted before 1 July 2016; or
  3. Was made or entered into pursuant to another arrangement, made before 1 July 2016, the only or main purpose of which was to defer the transfer or transaction until 1 July 2016, or later, so that duty would not be chargeable on the transfer or transaction.

Further information can be found at the NSW Office of State Revenue website:

Paul Conway – Marriott Oliver Solicitors Pty Ltd –  2016

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