As has been long anticipated, from 1 July 2016, Mortgage Duty and Business Assets Duty will be abolished in New South Wales.
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:
- A business asset, being, at any relevant time:
- Goodwill, if the business supplied in NSW, or provided services in NSW, to a customer of the business; or
- Intellectual property used in NSW; or
- A statutory licence or permission under a Commonwealth law if the rights under the licence or permission has been exercised in NSW.
- A statutory licence or permission under a NSW law (for example a taxi licence or water access licence).
- 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:
- Land and an interest in land (including a leasehold interest and fixtures).
- 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.
Abolition does not apply in respect of a transfer or transaction that occurs on or after 1 July 2016 if it:
- 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
- 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
- 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:
- Mortgage Duty – http://www.osr.nsw.gov.au/taxes/abolished/iga/factsheet/abolition-nsw-mortgage-duty
- Business Assets Duty – http://www.osr.nsw.gov.au/taxes/abolished/iga/factsheet/abolition-nsw-duty-business-assets
Paul Conway – Marriott Oliver Solicitors Pty Ltd – 2016