Stamp duty, known as transfer duty and administered by Revenue NSW, is a tax placed on the value of property being bought. Concessions and exemptions from stamp duty include the first home buyers assistance scheme. The Duties Act 1997 (the Act) regulates how stamp duty is imposed and how much duty is payable. Revenue NSW revenue rulings provide some guidance on how stamp duty is imposed and how concessions and exemptions are applied.
Which transactions attract stamp duty?
Stamp duty is imposed on ‘dutiable transactions’ which are defined by the Act. A common kind of dutiable transaction is a transfer of ‘dutiable property’ or an agreement to sell or transfer dutiable property (such as land).
What must I do?
Generally, the person who purchases the dutiable property is the one who must pay stamp duty. When the liability to pay duty arises is dependent on the type of dutiable transaction entered into. For example, if the transaction is a land transfer, the liability arose at the time of the transfer.
In order to pay stamp duty, there must be a written agreement under which the transaction occurred and you must complete a Purchaser/Transferee Declaration form. You may have to complete an additional form if you are claiming an exemption from duty or if the dutiable transaction occurred without a written agreement.
The lodgement must be made and the duty must be paid within three months of the liability to pay stamp duty arising. If you fail to comply with these strict deadlines, you may have to pay penalties or interest on top of the duty.
How much stamp duty is payable?
How much duty you must pay depends on the ‘dutiable value’ of the transaction and the kind of property that is transferred. The ‘dutiable value’ is usually the greater of the amount paid for the property, and the property’s value free from any encumbrances.
Different rates of stamp duty apply in the case of land, depending on the ‘dutiable value’.
Concessions and exemptions
There are several exemptions and concessions from stamp duty in New South Wales. These depend on the kind of property being transferred, and the relationship between the buyer and seller.
For example, transfers made after separation of a de-facto or married couple may be exempt from stamp duty if they are made as part of the division of matrimonial property.
The first home buyers assistance scheme
If you are a first home buyer in New South Wales and you purchase a house with a value of less than the threshold amount, you may be entitled to an exemption from stamp duty for the purchase. Whether the exemption is available will largely depend on whether you or your spouse have owned or co-owned residential property in Australia before. If the value of the house is more than the threshold you may nonetheless be entitled to pay a concessional rate of stamp duty.
What now?
Contact us for free no-obligation initial telephone advice about stamp duty.
