Duties Act 1997 (NSW) – Overview of Amendments (May 2022)
There are several key pieces of NSW legislation amended by the State Revenue and Fines Legislation
Amendment (Miscellaneous) Act 2022 (NSW) (Amending Act). These amendments will apply to certain transactions that are entered into on and from 19 May 2022.
You might be familiar with duty being assessed in relation to purchasing real property, however duty also applies to many other types of transactions. The Amending Act has now made the following changes to the Duties Act 1997 (NSW) and will affect the following types of transactions:
1. Transactions where there is a change in beneficial ownership of dutiable property
Duty will now be assessable on transactions which result in a change in beneficial ownership of a property, including by the following means:
the creation, extinguishment, or a change in equitable interest in dutiable property; or
dutiable property becoming or ceasing to be subject of a trust.
Examples of these transactions include put and/or call options, transfers granting easement and transfers creating a life tenancy (other than by a will or testamentary instrument).
2. Transactions involving a change in beneficial ownership – granting of an option
Put and/or call option arrangements which were previously exempt from duty will now incur an ad valorem duty which will be calculated on the amount of the option fee that is payable for the grant of option. If the call option is not exercised, you will not be entitled to a refund for the duty paid.
3. Acknowledgments of Trust (New Dutiable Event)
Duty will now be charged on the making of statement that has the effect of acknowledging that identified property vested, or to be vested, in the person making the statement is already held, or to be held, in trust for a person or purpose mentioned in the statement.
This change brings the legislation into line with recent Supreme Court decision, Benidorm Pty Ltd v Chief Commissioner of Revenue  NSWSC 47, which narrowed the scope of certain declaration of trust provision. You can read more about this case at: https://www.revenue.nsw.gov.au/help-centre/resources-library/case-summary/benidorm-pty-ltd-v-chief-commissioner-of-state-revenue-2020-nswsc-471)
4. Off the Plan Property Purchases
Permanent Defence Force personnel who are enrolled to vote in State elections will no longer be required to meet the current residence requirement for off-the-plan purchases to defer their payment of duty for a period of 12 months. The residence requirement will be met by all other purchasers who intend to use and occupy the property as their principal place of residence for a period of 6 months within the 12 months following settlement.
5. Break of Marriages and De-facto relationships
If as a consequence of a breakdown of marriage or de-facto relationship you are transferring or making an agreement regarding property, you may be exempt from duty if an agreement is made for the purpose of dividing property. Previously an exemption for duty would only apply, if you had a binding financial agreement or court order.
Further information can be found regarding the above changes along with other amendments to Taxation Administration Act 1996 (NSW), Land Tax Act 1956 (NSW) and First Home Owner Grant (New Homes) Act 2000: https://www.revenue.nsw.gov.au/electronic-duties-for-professionals/professionals-resources/duties-technical-guides/legislation-amendment-act-2022-guide?result_396764_result_page=1
If you require any assistance in relation to dutiable transactions, please contact our lease contact our office, as we would be more than happy to assist.
This article is not legal advice and the views and comments are of a general nature only. This article is not to be relied upon in substitute for detailed legal advice.