From 1 July 2016, NSW saw a number of changes to stamp duty. The changes are proposed to help businesses grow by abolishing more than $400 million a year in business tax.
SHARE TRANSFER STAMPING AND DUTY ABOLISHED
To 30 June 2016 share transfers required stamping and payment of duty; this was abolished abolished in NSW for proprietary companies from 1 July 2016.
DUTIES ON OTHER TRANSFERS
Duty on transfers of units in NSW Unit Trusts will also be abolished from 1 July 2016. Such transfers will not require stamping after this date.
Duty on the transfer of certain business assets will be abolished from 1 July. However, this does not include land or leasehold property.
MORTGAGE DUTY
From 1 July 2016, mortgage duty will be abolished in NSW. This will apply to all mortgages executed on or after this date. Mortgage duty will also not apply to variations of existing mortgages which previously required upstamping.
LANDHOLDER DUTY
The above changes may not apply for “landholders” – companies or trusts with real estate assets worth in excess of $2M. For landholders, certain acquisitions of shares or units will continue to attract transfer duty.
STAMP DUTY FOR FOREIGN PROPERTY INVESTORS
The NSW Budget released on June 21 announced a 4% stamp duty surcharge for foreigners buying real estate, effective immediately. In addition, foreign buyers will pay an additional 0.75% land tax surcharge from January 1 2017. The changes follow similar surcharges for foreign property investors in Victoria and Queensland.
The surcharges will not apply to Australian citizens, permanent residents of Australia or New Zealanders who have resided in Australia for at least 200 days in the past 12 months. The new surcharges for foreign buyers are expected to add $1 billion to the NSW budget over four years.